Ocado said that it predicts the deal will have a neutral impact on its earnings this year.
The UK-based online grocer, which has achieved remarkable growth since its foundation in 2002, has teamed up with one of the world's biggest retailers to provide it with its unique technology solutions.
Ocado CEO Tim Steiner is confident that this deal, and others like it, will "transform the shopping experience of consumers around the world".More news: Brussels calls on Italy to stay committed to the 'European path'
Rodney McMullen, Kroger's chief executive, said the partnership would the grocer "redefine the food and grocery customer experience - creating value for customers and shareholders alike".
The Kroger deal is definitely Ocado's biggest yet but certainly not its first. In the next three years, they will identify up to 20 warehouse sites. It has struck partnerships with Groupe Casino in France, Sobeys in Canada, and ICA Group in Sweden. Ocado Solutions CEO Luke Jensen is certainly intrigued by the opportunity at hand, noting that the "grocery online market in the USA has been relatively underdeveloped compared with some European markets".
Kroger operates almost 2,800 stores in 35 USA states and has a turnover of more than $115 billion (£85 bn).
It has even said it will pay compensation if it fails to hit the capacity targets the two retailers have agreed. Kroger will also take a 5 per cent stake in Ocado.
The surprise deal and jump in the share price caught out many hedge funds betting the next move would be down.
Ocado has broken off talks with other United States supermarket chains following the deal with Kroger, which operates nearly 2,800 stores across the USA under various brands.