The deal comes just weeks after reports that Nest was raising around $150 million in new venture capital funding to be led by Yuri Milner’s DST Global, which apparently never happened (and possibly was never going to).

RELATED: Nest’s newest device? A smoke detector

Nest was founded in 2010 by Tony Fadell, a former Apple  (AAPL) executive known for his design work on the original iPod.

“This decision wasn’t made on a whim – Google has been in the mix in some way or another for about three years of our almost four-year history,” Fadell explains in a blog post. “In fact, my first meeting with Google as a Nester was before we’d launched. At the 2011 TED Conference, Erik Charlton and I huddled in a corner with Sergey Brin to show him a video and an early model of the Nest Learning Thermostat – he instantly got what we were doing and so did the rest of the Google team when we showed them… I know that joining Google will be an easy transition because we’re partnering with a company that gets what we do and who we are at Nest –and wants us to stay that way.”

RELATED: Where Google Ventures is pinning its hopes

Google also was an existing Nest investor, having led the company’s second round of VC funding in early 2011 via its Google Ventures group.

To date, Nest had raised over $80 million in VC funding from Kleiner Perkins Caufield & Byers, Shasta Ventures, Venrock, Google Ventures, Lightspeed Venture Partners, Intertrust and Generation Investment Management. Kleiner Perkins is believed to be the company’s largest outside shareholder, with one source saying that it will generate around a 20x gross return on its investment.

Google reported $54.7 billion in cash as of its most recent quarterly report, meaning that this deal would represent around 5.8% of its cash on hand.

Below is an interview with Fadell from Fortune Brainstorm Green, from last May:

[youtube=http://www.youtube.com/watch?v=zP03lgJKXHI#t=50]

Sign up for Dan Primack’s daily email newsletter on deals and deal-makers: GetTermSheet.com