The headquarter of Tencent in Shenzhen. [File photo]

Chinese internet giant Tencent has reportedly agreed to acquire China's leading online music provider "China Music Corp" for roughly $2.7 billion.

Tencent already holds 16 percent of company shares at this point.

Its holding will be up to 60 percent after the completion of the deal.

Tencent is said to be planning a merger between its own online music service QQ Music and China Music Corp in a move to create a dominant player in the domestic market.

Sources familiar with the matter say the new business, valued at around $6 billion, will be operated as a subsidiary of Tencent.

China Music Corp had been planning an initial public offering in the US.

The move has been put on hold as a result of the new deal.

Data compiled by market research firm iiMedia show China had nearly 450 million mobile-music users in this year's Q1, the world's biggest market in this field.