Keystone provides a range of water associated services to the oil and gas firms working mostly in the Appalachian region of Pennsylvania, Ohio and West Virginia.
Once the acquisition is completed, Keystone will operate as a separate, independent subsidiary of American Water.
American Water will continue to deliver field and water-associated services to Rex Energy within its Appalachian Basin properties in Pennsylvania and Ohio.
The transaction, which is subject to customary closing conditions and regulatory approval, is expected to be completed in July.
American Water president and CEO Susan Story said: "Keystone Clearwater Solutions provides turn-key water solutions to the shale gas industry in a safe and environmentally responsible manner.
"Coupled with our existing activity in shale, the Keystone acquisition will enhance our ability to provide additional water services solutions to shale development companies."
Rex Energy chief executive officer Tom Stabley said: "This transaction marks a critical step for Rex Energy as we continue to enhance our balance sheet and provide the necessary flexibility for the development of our core assets in the Appalachian Basin."
