The two companies entered into exclusive talks for the mobile operator in January this year, and terms have now been agreed on both sides.
The deal will create the UK’s biggest mobile operator and O2 said that it would focus on ensuring it was the country’s “most customer-centric” mobile player.
The deal is subject to regulatory approvals and may take up to a year to complete.
The acquisition from Hutchison follows BT’s successful bid for the UK’s existing number one mobile player EE in December, for which Hutchison was rumoured to be considering an offer.
