Microsoft Corp. on Monday said it will buy Internet communications company Skype for 8.5 billion U.S. dollars in cash, a bold move for the software giant to explore new business opportunities.

"Skype is a phenomenal service that is loved by millions of people around the world," Microsoft CEO Steve Ballmer said in a statement.

"Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world," he added.

Microsoft said it has agreed to buy Skype from the investor group led by Silver Lake, and the deal has been approved by the boards of directors of both companies.

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

The acquisition is expected to obtain all required regulatory clearances within this calendar year, Microsoft said.