The investment is by far the biggest made by a Japanese company into China on record, according to Thomson Reuters data, beating a $1 billion investment by Nissan Motor into Dongfeng Motor Corp in 2002.
While deals between Chinese and Japanese companies have become more frequent in recent years, Thomson Reuters data show that most have been small. The 55 Japanese acquisitions in China last year were worth a total of around $772 million.
It is also the biggest ever by Itochu, and comes as it is trying to expand its business interests beyond resources, an area where it spent heavily during the global commodities boom through the early 2010s.
Before the Citic deal, Itochu's biggest investment was a 156.9 billion yen purchase of two units of U.S. vegetable and fruit producer Dole Foods in 2013.
The deal will take place in two stages, with Itochu and CP Group agreeing to buy nearly 2.5 billion shares in Citic for HK$34.4 billion in April this year, and a further 3.3 billion shares for HK$45.9 billion in October.
Some analysts said the investment, which will likely require borrowing from banks, appeared risky for Itochu considering its market capitalisation was only slightly over 2 trillion yen.
"From a concentration risk perspective, it appears to be high risk," said Nomura Securities analyst Yasuhiro Narita.
"While Citic is a conglomerate, it deals with areas such as real estate and raw materials development which are facing deteriorating conditions, we need to note the possibility of future losses," he added.
For CP Group, a conglomerate controlled by Thailand's second richest man Dhanin Chearavanont, the deal is the latest in a long series of investments in to China ranging from agriculture and retail to finance.
It was the first multinational to invest in China's agri-business in 1979, helping it modernise China's farm sector.