The sale, however, still faces scrutiny by an anti-trust regulator in Chile as it would leave Tianqi just shy of a controlling stake in SQM, the world's second-largest lithium producer, and likely entitle the company to appoint three seats on its board.
Tianqi, which is already building a major lithium processor in Western Australia, said it will buy 62.5 million SQM A shares for $65 each from Canada-based fertilizer company Nutrien Ltd.
Tianqi's interest comes as Beijing aggressively promotes electric vehicles to combat air pollution and help China's domestic carmakers leapfrog the combustion engine to build global brands.
Chile's former government in March filed a complaint with the FNE antitrust regulator seeking to block the sale of the shares to Tianqi, alleging a potential fusion between the two lithium giants would distort the global lithium market and could give China the upper hand in a global race to secure resources for electric vehicles.
Chile's Economy Minister Jose Valente told Reuters following the announcement that the government would respect an eventual ruling by the country's regulators on the deal.
"We have strong laws on free competition...The FNE must deliberate and give its opinion with respect to (this deal) and we will abide by their decision," Valente said.
He added that the Chilean government welcomed foreign investment and would not discriminate by nationality.
The FNE regulator has until August, with the possibility of extensions, to decide whether to launch a full investigation into the case.
Nutrien Chief Executive Chuck Magro said at a BMO investor conference in New York that he was confident the deal would not trigger antitrust concerns and would be completed by the fourth quarter.
Corfo, the Chilean agency that filed the complaint to block the sale of the stake to Tianqi, said in a statement it was awaiting the FNE's decision and would cooperate in its investigation.
The FNE regulator responsible for ruling on the complaint declined to comment.
Reuters reported earlier this week that Tianqi and SQM were in talks for a deal. Tianqi had been circling SQM since 2016.
Earlier on Thursday, Australia's Kidman Resources Ltd said it would supply lithium for Tesla Inc electric car batteries.
The 24-percent stake sale is necessary for Nutrien to meet regulatory commitments after it was formed in January by the merger of Agrium and Potash Corp of Saskatchewan..
SQM, whose U.S.-listed shares fell 6.4 percent at $54.42, also has a significant fertilizer business. Nutrien shares eased 0.4 percent in Toronto to C$65.92.
Nutrien has said it plans to use proceeds from the sale of stakes in SQM and two other companies in part to expand its network of farm retail stores in the United States, and to establish a network in Brazil.
Nutrien plans to sell its remaining 20.2 million B shares of SQM - a nearly 8 percent stake - in the future.
(Reporting by Yashaswini Swamynathan in Bengaluru and Marcy Nicholson in New York; additional reporting by Felipe Iturrieta, Antonio de la Jara and Dave Sherwood in Santiago; writing by Rod Nickel and Dave Sherwood; Editing by Bernard Orr and Marguerita Choy)
By Yashaswini Swamynathan and Marcy Nicholson