Telefónica and the Hong Kong based holding company agreed on a purchase price of £10.25 billion ($15.24 billion)—with about £9.25 billion composed in up front payment.
Regulatory authorities will need to approve the deal before it can be completed.
Hutchison's owner, Hong Kong billionaire Li Ka-shing, announced in January the plans to buy O2. The conglomerate already owns British mobile operator Three.
Li is Asia's richest individual, with a fortune estimated by Forbes at about $35 billion. His sprawling ports-to-retail global conglomerate operates in more than 50 countries.
—The Associated Press contributed to this report.