The deal, which is yet to be ratified by the Chinese authorities, is set to be completed by 1 September. A memorandum of understanding will be signed on Friday to coincide with a Chinese state visit to Denmark.
The plant has around 120 employees and can produce onshore and offshore towers.
Titan said the acquisition would provide it with a foothold in the European market. In China, the company is one of the largest manufacturers in the sector producing around 1,600 units a year.
Speaking about the deal, Vestas CEO Ditlev Engel said: "This is an excellent agreement for all parties involved. Vestas welcomes the establishment of Titan Wind Energy in what might be described as the cradle of the global wind industry and we see a huge potential in the ongoing cooperation and co-development with Titan Wind Towers.
"Meanwhile, I would like to express my gratitude to the employees at the Varde facility, who have been loyal to Vestas during an uncertain period. I am truly happy that many of these skilled employees can now continue working at the factory in Varde for a trusted Vestas partner."
Titan CEO Yan Junxu said: "We have been cooperating with Vestas for several years, both in China and abroad, and we look forward to further utilising our long-standing partnership within the development and production of technology-leading towers for wind turbines."
"Our new towers facility here in Denmark increases our possibilities of servicing and expanding our global customer base. The location of our European headquarters in Varde is optimal because we see Denmark as the focal point for the global wind industry. Europe is the region that offers the most promising outlook for the development of offshore wind energy."