Tencent is heavily investing in Ubisoft with a €300m investment in Guillemot Bros, the company run by Ubisoft's co-founders.
Tencent now has a 49.9 percent stake in Guillemot Bros., which has the largest stake in Ubisoft.
In turn, Tencent will bring some of Ubisoft's biggest franchises to mobile.
Last month, it was reported that Tencent was looking to become the single largest Ubisoft shareholder.
With this new deal, Tencent has been allowed to more than double its stake in Ubisoft to 9.99 percent, while Guillemot Bros.' stake in Ubisoft can reach 29.9 percent.
Combined, Tencent and Guillemot Bros. could own the majority of Ubisoft stock, with the board still dominated by the Guillemot family.
"The expansion of the concert with Tencent further reinforces Ubisoft's core shareholding around its founders and provides the company with the stability essential for its long-term development," said Yves Guillemot, CEO and co-founder of Ubisoft.
"In a context where platforms and business models are converging, this transaction, which validates our strategy and highlights the strong intrinsic value of the assets we have built over the long term, is excellent news for our teams, gamers and shareholders. Tencent is a key shareholder partner for many of the industry's leaders, who have created some of the most outstanding video games. This transaction reinforces our ability to create strong value over the coming years."
Martin Lau, President of Tencent, added: "We are excited to expand our engagement with the founders, the Guillemot family, as Ubisoft continues to develop immersive game experiences, and to bring some of Ubisoft's most well-known AAA franchises to mobile. This agreement also aligns with our philosophy to invest alongside creative founders with full confidence that they will lead their companies to new heights."
Ubisoft has historically resisted takeover bids, but earlier this year said it would consider acquisition offers despite having "everything we need to remain independent".
Tencent has also recently increased its stakes in Elden Ring developer FromSoftware, along with Sony.