GM did not disclose terms of the deal, but said Penske's rescue of Saturn would save 13,000 jobs.
GM said it would continue to manufacture the brand under contract with the Penske Automotive Group, The Washington Post reported.
Penske, a former race car driver, is an iconic figure in Detroit who organized the city's Super Bowl event and a downtown revitalization program. The Penske Automotive Group Inc. is the nation's second largest auto retailer, the Detroit Free Press reported.
GM is in bankruptcy court and was planning to dump Saturn, Hummer, Saab and Pontiac. Earlier this week, a Chinese manufacturer emerged as a buyer for Hummer, which GM will also produce under contract.
GM had said 16 separate buyers had made inquiries into buying the Saturn brand.
In a conference call Friday, Penske said the brand "has a passionate customer base and (an) outstanding dealer network."
"For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths," Penske said.
The deal is expected to close in the third quarter