"It's Buffett and Gates merging in a way for charitable purposes," Kilpatrick said.

Buffett has long said limiting the spread of nuclear weapons is the greatest challenge facing mankind. And Kilpatrick said Buffett probably agrees with the Gateses' concerns about population control, disease and education.

In a statement, Bill and Melinda Gates applauded Buffett's decision.

"We are awed by our friend Warren Buffett's decision to use his fortune to address the world's most challenging inequities, and we are humbled that he has chosen to direct a large portion of it to the Bill & Melinda Gates Foundation," the couple said.

Buffett suggested that his children should focus their charitable resources on needs that would not be met otherwise.

"Focus the new funds and your energy on a relatively few activities in which HGB (Howard G. Buffett Foundation) can make an important difference," Buffett wrote. He included the same paragraph of advice in the letters to each of his children.

Buffett said he plans to earmark 10 million B shares for the Gates Foundation, 1 million B shares for the Susan Thompson Buffett Foundation named in honor of his wife and 350,000 shares for the three foundations run by each of his children.

Buffett plans to give each foundation 5 percent of his total pledge each year in July.

In the interview with Fortune, Buffett acknowledged that the foundations may sell off the Berkshire stock to raise cash. But Buffett said he doesn't think that will affect the price of the stock because the gifts will be spread over time.

"I would not be making the gifts if they would in any way harm Berkshire's shareholders," Buffett told Fortune. "And they won't."

But Kilpatrick said this announcement is still likely to prompt some people to sell Berkshire stock on Monday morning. Kilpatrick said he doesn't think this will hurt the company in the long run especially because it might be added to the S&P 500 index in the future, which would help the stock.

Buffett's health has been the subject of speculation. He has said a succession plan is in place at Berkshire but refuses to name a successor.

In the letters, Buffett wrote, "My doctor tells me that I am in excellent health, and I certainly feel that I am."

Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility firms. And it has major investments in such companies as H&R Block Inc., Anheuser-Busch Cos. and Coca-Cola Co.