Facebook is set to acquire popular photo app Instagram for around $1 billion (£630 million). The purchase will be made using both cash and stock and Facebook has said it will allow Instagram to grow independently.

The Instagram app is free and allows users to apply different special effects to their photos before they are uploaded. Proving hugely popular, the firm says that it has more than 30 million users uploading more than 5 million new pictures every day.

Announcing the deal on his Facebook Timeline, Facebook CEO Mark Zuckerberg said: “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 other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook."

He added: "This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all."