The two companies said that the $530m deal will also include a strategic alliance that will allow Razorfish customers to purchase online and search ads from Microsoft at a discounted rate.
Microsoft first brought Razorfish on board in 2007 when the company paid $6bn to acquire parent company aQuantive. Among the company's major clients are retailer Best Buy, Ford and Starbuck's.
"We are grateful for the contributions Razorfish has made to our online advertising business since joining the company as a part of the aQuantive acquisition in 2007, and are pleased that it has found a new long-term home with Publicis Groupe," said Microsoft chief executive Steve Ballmer.
"We look forward to continuing to work with Razorfish as one of our agencies, and we're confident that as a part of Publicis Groupe, Razorfish will build on its success to date in the digital advertising industry."
Publicis hopes that the deal will make the company a major player in the online marketing field.
"More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent, and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world," said chairman and chief executive Maurice Levy.
"Our capabilities will be further enhanced by the great talent throughout Razorfish, and we are happy to welcome this new addition to our family."
Upon completion of the deal, Publicis will run Razorfish as its own brand as a part of the company's VivaKi division.
The Razorfish sale is the latest in what has been a busy summer for Microsoft's online advertising operations. Late last month the company finally came to terms with Yahoo on a 10 year search advertising deal.
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