Firm secures three-year licence to create a range of accessories and merchandise based on the brand.
The deal is in line with Funtastic's plans to move from being primarily a distributor, to one with its own product line and IP also.
The range will be distributed throughout Europe, the UK, North America, New Zealand and Australia, as well as Toys R Us stores throughout Asia. The licence was acquired from Melbourne distribution business KP Multinational in a $2.7 million deal.
Prior to the deal, Funtastic was the Australian distributor for KPM and had distributed its Lego accessories worldwide.
Funtastic also holds distribution licences for children's brands including Ben 10, The Wiggles, Disney and Razor scooters and counts Lachlan Murdoch among its major shareholders.
Chief executive officer, Funtastic, Stewart Downs, said: "This partnership will see Funtastic's current Lego product range extend into storage, luggage, bags and accessories, play accessories and stationery."