The joint venture, with combined revenues of €414 million ($391 million), will bring together the German giant's subsidiaries in Poland, the Czech Republic and Hungary with Ringier's operations in Serbia, Slovakia, Czech Republic and Hungary, the companies said in a statement.
"For both companies, this partnership is an excellent opportunity to considerably increase our journalistic core business with five market-leading tabloid newspapers in attractive growth markets," Axel Springer chief executive Mathias Döpfner said. "It establishes optimal conditions for future expansion in the era of digitalisation."
More than 100 print and 70 online publications with a claimed total of 9.3 million readers will come under the merged group which will have around 4,800 employees.
Springer and Ringier will each hold a 50 percent share in the company based in the Swiss city of Zurich and they plan to float it the stock market in three to five years.
"Together we are so well positioned in the individual markets that we will jointly take this new company public," Ringier chief executive Christian Unger said.
"It will be instrumental in shaping the future of the emerging media markets in Eastern Europe."
Springer and Ringier said in a presentation that they were aiming to expand their joint digital business in eastern Europe over the next three years and had already identified potential acquisitions. The deal has to be approved by regulators in each country.
Döpfner did not rule out expansion into other countries, including Romania and Ukraine.
"It's a defining step in Axel Springer's internationalisation strategy and opens completely new horizons," he said in Zurich.
Both media groups are still controlled by their respective founding families.