The acquisition is expected to complete in the second half of 2013.
Citic Telecom has agreed to acquire a 79% stake in the telecom services provider, Companhia de Telecomunicacoes de Macau (CTM) from Portugal Telecom for $1.16bn.
Cable & Wireless will sell its 51% interest in CTM to Citic for $749.7m, while Portugal Telecom will sell its 28% interest for $411.6m.
After completion, the acquisition will increase Citic's shareholding in CTM to 99%, up from 20%.
The acquisition, which is subject to approvals from the Macau Government and regulatory authorities, is expected to complete in the second half of 2013.
Citic Telecom chairman Xin Yue Jiang said: "The increase in CITIC Telecom's stake in CTM facilitates our long term business expansion, generates solid synergies with our business integration and enables us to realise higher business growth."
"The acquisitions should also prove beneficial to the development of the community in Macau," Jiang said.
Citic said that it expects to fund the acquisitions with its existing cash resources and new bank loan facilities.
Citic has also signed a three-year strategic alliance agreement with Portugal Telecom under which both the companies will identify investment opportunities in information and communication technology (ICT).
CTM offers mobile, fixed line and broadband services in Macau and currently holds the rights to provide local and international switched fixed voice as well as data services granted by the Macau Government until 2021.