As part of a $2.1 billion (1.3 billion pounds) deal first outlined in August Barclays will raise its stake in Absa, South Africa's third-largest bank by value, to 62.3 percent from 55.5 percent.
Absa had been prevented from expanding into Africa as its parent was already operating in the region, effectively ceding some lucrative markets to bigger rivals such as Standard Bank and FirstRand .
Absa will be renamed Barclays Africa Group Ltd but will retain the Absa brand for its retail and card business in South Africa once the transaction is completed in the first half of next year, the banks said in a joint statement.
Barclays plans in the region were revealed in August as a "One Africa" strategy and a platform for further growth.
Some of Barclays' operations that will be folded into Absa as part of the deal have been running for close to a century and cover Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda and Zambia.
Barclays first mooted the idea of selling its African assets to Absa when it acquired the lender in 2005, but the pair couldn't agree on price.
"The big benefit is they get a business that is up and running," Afrifocus Securities analyst Johann Scholtz said. "It places Absa on equal footing with the likes of Standard Bank."
The Egyptian and Zimbabwean businesses were left out of the 18.3 billion rand transaction and Barclays units in Kenya and Botswana will retain their listings on local bourses.
"Initial impressions are that the price they (Absa) are paying for it is not overly demanding. It's about 1.7 times book, which is pretty much in line with where Absa itself is currently trading," Scholtz said.
Absa CEO Maria Ramos said the transaction was unlikely to lead to job cuts though there will be board changes at Absa.
"We've already done over the last year and a half a lot of work on pulling our operations together. We are not doing this to cut jobs," she told journalists on a telephone conference.
South Africa's "Big Four" lenders have been extending their reach north hoping to hedge against competition back home and dwindling fortunes in developed markets.
Standard Bank has scaled back from Latin America and Europe to concentrate on its 17 African businesses, while FirstRand is trying to expand its reach past the seven countries it already operates in and into Ghana and Nigeria.
Nedbank , the smallest of the four, is in a strategic partnership with Ecobank that could see it take up a stake in the pan-African lender.
Absa shares gained 4.6 percent to 148.27 rand at 1009 GMT, while those of Barclays were up 1.7 percent.
Absa shares have lagged those of rivals, growing only 5 percent year to date, compared with nearly 50 percent for FirstRand and 25 percent by Nedbank.
($1 = 8.7866 South African rand)
(Additional reporting by Olivia Kumwenda; Editing by Ed Cropley and Elaine Hardcastle)