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It comes after the company launched a strategic review into the facility.
IPL said it conducted a "robust competitive sales process".
IPL has also secured a 25-year ammonia supply agreement with CF for up to 200,000 short tonnes of ammonia per annum to support the Dyno Nobel Americas (DNA) explosives business.
The supply agreement secures ammonia at producer cost for the DNA business.
The value allocated to the ammonia supply agreement is roughly $425 million, which will be offset from the cash proceeds of the sale agreement for Waggaman.
"Our announcement today represents a pivotal step in the execution of our strategy to enhance the focus of our businesses on the high value technical and service needs of our explosives customers," IPL managing director and CEO Jeanne Johns said.
"We are also delighted to be partnering with CF Industries, a world-class producer of ammonia with an excellent manufacturing and safety track record. We are looking forward to this journey as we seek to deliver long-term sustainable value creation for our shareholders and stakeholders."
Shares in IPL last traded at A$3.12, valuing the company at $6 billion.
