The cellular giant reached a deal with NII Holdings, a bankrupt holding company that operates Nextel Mexico, to acquire the company's assets and wireless properties, including network assets, stores, licenses for spectrum, and around 3 million subscribers.
AT&T expects the deal, which excludes outstanding debt, to clear by the middle of this year.
Nextel Mexico has a large network, offering service to about 76 million customers in the country -- roughly half its population.
The deal will also expand AT&T's foothold in the country.
"Combining Nextel Mexico with Iusacell will allow AT&T to more quickly improve and expand its mobile Internet service to the benefit of millions of Mexicans, particularly those who live outside major metropolitan areas, than it could otherwise do without the transaction," AT&T said in a statement on its website.
Both U.S. and Mexican regulators must approve the deal.