Spain-based Telefonica said the purchase price includes an initial amount of 9.3 billion pounds and another 1 billion pounds to be paid later.
The deal was reached after due diligence over O2 was completed, Telefonica said in a brief statement. It added that the completion of the transaction is subject to regulatory approval, which could take a year.
Hutchison already owns the smaller British mobile operator Three. The agreement, if approved, will bring about the merger of two of Britain's four major operators.
"This deal will — subject to merger clearance — result in the creation of the most customer-centric mobile operator in the UK," O2 said in a statement. It added that as a result of the deal, it was confident its customers would "benefit from greater value, quality and innovation."
Hutchison's owner, Hong Kong billionaire Li Ka-shing, announced in January the plans to buy O2.
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.