Intel is to acquire McAfee for around $7.68 billion (4.9 billion) in an agreement that will make the security giant a wholly-owned subsidiary.
The deal will see Intel buy all of the security company's common stock at $48 per share after both boards unanimously approved the agreement.
Intel said the purchase is reflective of the growing importance of security in online computing - an area that needs improving to provide more complete protection.
"In the past, energy-efficient performance and connectivity have defined computing requirements," said Paul Otellini, Intel president and chief executive.
"Looking forward, security will join those as a third pillar of what people demand from all computing experiences."
Otellini said the acquisition will bring some "incredibly talented people" into the Intel fold along with a range of popular security products, including McAfee Antivirus, McAfee Total Protection and McAfee Firewall.
Around 6,100 employees from McAfee will now be under the wing of a new owner.
McAfee will be placed in Intel's Software and Services Group, which is managed by Renee James, Intel senior vice president.
"Hardware-enhanced security will lead to breakthroughs in effectively countering the increasingly sophisticated threats of today and tomorrow," James said.
"Our current work together has impressive prospects, and we look forward to introducing a product from our strategic partnership next year."
The pair will also collaborate on product concepts that will cover the range of security that is required in the modern day world.
Intel has been busy acquiring firms recently, and just this week agreed to purchase Texas Instruments' cable modem division.
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Tom Brewster is currently an associate editor at Forbes and an award-winning journalist who covers cyber security, surveillance, and privacy. Starting his career at ITPro as a staff writer and working up to a senior staff writer role, Tom has been covering the tech industry for more than ten years and is considered one of the leading journalists in his specialism.
He is a proud alum of the University of Sheffield where he secured an undergraduate degree in English Literature before undertaking a certification from General Assembly in web development.