In an offer valued at $588 million in total, it has committed under the conditional sale agreement to take on $342m of Westland's debt and liabilities. Yili has also undertaken to match Fonterra's milk price for 10 years and to pick up all milk for a decade after the sale.
Westland farmers have not received a market price for their milk for several years.
The deal now needs Government approval through the Overseas Investment Office and a tick from the High Court.