Through its subsidiary NKYRG, Churchill Downs will purchase the track in a $46m deal "subject to certain working capital and other purchase price adjustments."
The operator is planning a $150m refurbishment of the property, which will see the demolition of the existing grandstand after the 2019/2020 winter thoroughbred racing meet.
The refurbishment is expected to include 1500 racing machines, a clubhouse, food and beverage venues and a new track.
After receiving approval for the deal, Churchill Downs announced it will no longer pursue plans to construct New Latonia Racing and Gaming - a $200m race track and training facility in Northern Kentucky.
Kevin Flanery, President of Churchill Downs Race Track, said: "Our team is poised to restore Turfway to its former glory, anchored by northern Kentucky’s first historical racing machine facility."
