"By connecting your phone number with Facebook's systems, Facebook can offer better friend suggestions and show you more relevant ads," a WhatsApp press release said.
The company said they will not "sell, share or give" users' phone numbers to advertisers.
In April 2015, Facebook-owned WhatsApp instituted end-to-end encryption for all communications on its network of more than 1 billion people worldwide.
WhatsApp's policy on encrypted messages remained the same.
"Even as we coordinated with Facebook in the months ahead, your encrypted messages say private and no one else can read them," the release said.
"Not WhatsApp, not Facebook, nor anyone else."
Existing users who want to opt out of sharing WhatsApp account information with Facebook can do so immediately after accepting the updated policy or under account settings within the first month.
This is the first time WhatsApp updated its policy since Facebook acquired the company in 2014 for 22 billion dollars.