Amazon will take an 18 percent stake in Living.com and get warrants to acquire 9 percent more of the company. Living.com will pay Amazon $145 million over five years for exclusive status on Amazon's site.
The new Home Living store will sell furniture, bedding, home textiles, decorative accessories, tabletop and window treatments, and will be listed alongside Amazon's other stores.
Amazon CEO Jeff Bezos was part of the company's continuing drive to make the site "the place where you can find and discover anything and everything you might be looking to buy online."
Amazon, which made its name as a bookseller, has since branched out significantly. Last year, the company opened up stores selling software, video games and home improvement products.
The company has been rumored to be interested in the home goods space for some time.