ESB has announced that it will buy the Northern Ireland Electricity networks business from Viridian for €1.2bn.
The purchase also covers associated businesses that provide electrical construction and maintenance services.
The NIE Group employs 1,300 staff and the deal will see it continue to operate under its own brand.
Viridian runs the generation and supply business Energia, which operates wind farms and the Huntstown power station in Dublin.
ESB said the link will help both the Irish and Northern Irish governments to hit their policy and environmental objectives in developing renewable generation, smart metering and ensuring security of supply.
It has spent €6bn on refurbishing the Republic's energy infrastructure over the past ten years.
Its Chief Executive Padraig McManus said: 'This acquisition demonstrates ESB's continued ambition to grow our business in the rapidly changing energy sector on this island.
'NIE is a well-run, efficient business and will continue to operate on that basis.
'ESB is fully committed to delivering the significant investment in Northern Ireland's transmission and distribution networks that will be required to deliver our common energy sustainability policy objectives over the coming years and we believe that customers in Northern Ireland will benefit from this transaction in the longer term.'
The deal still has to be cleared by both Irish and British competition authorities, but it is expected to be completed by the end of this year.
Energy ministers welcome deal
Minister for Communications, Energy and Natural Resources Eamon Ryan has welcomed the deal.
He said: 'ESB is one of Ireland's flagship semi-state companies and in the context of the single market this will bring great efficiencies and the ability to work together on renewable energy.'
Stormont Energy Minister Arlene Foster said ESB has been given assurances on a range of issues relating to the sale.
'These include ESB investment plans, the importance of securing existing jobs, and maintaining the identity of the electricity network business in Northern Ireland,' she said.
'I will continue to keep a close watch as the transaction proceeds towards completion, to ensure the interests of electricity consumers in Northern Ireland are being properly considered.'
