Spain's Telefonica said it had finalised a deal to sell its British mobile business O2 to Three Mobile’s parent company Hutchison Whampoa for £10.25bn, confirming details announced earlier this year.
Telefonica and Hutchison entered exclusive negotiations over O2 on 23 January.
The Spanish operator said that a definitive agreement had now been reached after completion of due diligence on the British unit.
The sale will hasten the consolidation of Britain's telecoms industry.
Hutchison already operates the Three Mobile network in Britain, and buying second-ranked O2, which has about 22 million subscribers, will make it the top mobile operator there.
It follows a deal between the two companies in Ireland, which saw Hutchison acquire O2 Ireland for €780m in 2013.
That tie-up has made Three the second largest mobile operating in the country behind Vodafone.
Completion of the British deal is subject to regulatory approval, Telefonica said, adding that should take place by 30 June 30, with a possible extension of this timeline to 30 September.