The acquisition will make SAR-listed China Mobile (Hong Kong) the world's second largest operator in subscriber numbers after Vodaphone, which has 59 million subscribers.
As part of the deal, UK-based Vodafone will invest US$2.5 billion in China Mobile, receiving in exchange about two percent of new shares in the company and access to a market forecast to be the world's second largest by the end of the year. About 3.5 percent of the population use mobile phones.
China Mobile said it would buy seven networks, some in the mainland's most affluent areas.
They are in Beijing, Shanghai, Tianjin, Shandong, Hebei, Liaoning and Guangxi.
It would also acquire the networks' US$1.16 billion net debt from China Mobile Communications, the ultimate parent of the SAR-listed company.
The acquisition will add 13.6 million subscribers to China Mobile, increasing its subscriber base to 35.28 million from 21.63 million at the end of June.
The deal is bigger than the takeover by Pacific Century CyberWorks of Cable & Wireless HKT, which went through at US$28 billion in August, though it was worth as much as US$38 billion when it was announced in February.
Vodafone chief executive Chris Gent said the alliance with the world's fastest growing mobile market, was a big step in its global expansion plan.
"China Mobile and Vodafone will explore suitable opportunities for joint ventures and other equity-based strategic alliances," Vodafone said.
The tie-up signalled the first major step by a foreign company to enter the mainland's telecommunications sector ahead of the country's entry to the World Trade Organisation, expected early next year.
Japan's biggest telecoms company, NTT DoCoMo, and Germany's market leader, Deutsche Telekom AG, had also shown interest in a partnership with China Mobile.
China Mobile chose Vodafone because "Vodafone and us both focus only on the mobile business", according to China Mobile chairman Wang Xiaochu.
More important was that China Mobile intended to learn from Vodafone's management experience as an international mobile operator, in order to improve its competence in the market and expand into the global arena, Wang said.
"It's great news for China Mobile," said Billy Ho, chief investment officer at Core Pacific Asset Management. "A strategic alliance with one of the world's largest telecoms companies reinforces its future as China's leading mobile phone company."
China Mobile said three-quarters of the cost of the deal, or US$22.67 billion, would be covered by issuing new shares to the parent, allowing the parent to retain a 75 percent stake.
The remaining US$10.17 billion would be paid in cash, including syndicated loans, a convertible note offer, and an international share offer, the latter two expected late this month or early next month.
China Mobile had been in talks to buy the networks since June. It needs to buy more networks on the mainland to maintain its market share, which declined to 83 percent in the first six months of this year from 93 percent a year ago.