The flat-packing firm will open at least nine stores across Chile, Colombia and Peru over a ten-year period, as well as making internet shopping available in the nations.
The Swedish company's first South American warehouse will open in Chilean capital Santiago at the end of 2020, followed by further warehouses in Lima, Peru and Bogotá, Colombia.
Ikea has signed a partnership with Chilean retailer Falabella as part of the expansion.
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"We will bring the full Ikea experience to the three countries, with stores and online sales such as those already existing in Europe, the US and Asia. Ikea will complement the current offer of products and services of our home improvement subsidiary Sodimac. As has happened in other countries, we want Ikea to become one of the favourite brands of Chileans, Peruvians and Colombians," Falabella CEO Sandro Solari said in a statement.
Ikea is also in the process of exploring a possible expansion further north in Mexico, where partner Ikano Group (who operate Ikea stores in Singapore, Malaysia and Thailand) opened an office in 2017.