Facebook CEO Mark Zuckerberg said Monday that his company will acquire photo-sharing platform Instagram for $1 billion in cash and shares.

Instagram, which has more than 40 million users, raised a new round of funding recently that brought its value to $500 million.

Zuckerberg said Instagram will remain independent.

“We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to ...