Canyon Bridge will pay 550 million pounds cash ($743 million) for the British group, which specialises in mobile graphics processor technology, Imagination said.
Imagination's products were widely used in Apple's iPhone among other products, but are being phased out.
Imagination, in a statement Friday, also said it would sell the US semiconductor firm it bought in 2013, MIPS, to Tallwood Venture Capital for $65 million.
US President Donald Trump blocked Canyon Bridge's US deal in mid-September over national security concerns.
The decision banned Canyon Bridge, its Chinese partner Yitai Capital and Yitai's parent, the China Venture Capital Fund Corp, from purchasing the US firm, which serves the consumer, communications and industrial markets.
Trump has the authority to block foreign investments which he deems to be national security threats through the Committee on Foreign Investment.
Canyon Bridge says it manages about $1.5 billion on behalf of Yitai Capital.
Trump's predecessor Barack Obama also intervened to block a similar deal involving semiconductors on security concerns last year.
Chinese government-backed Grand Chip Investment scrapped plans to buy German semiconductor equipment maker Aixtron in December after Washington rejected the inclusion of Aixtron's US unit over fears it could put sensitive technology with potential military applications in Chinese hands.
The takeover of Imagination Technologies takes place one year after the acquisition of British chip designer ARM Holdings by Japan's Softbank for $32 billion.
dly/sm
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