The purchase will be made in cash and through promissory loan notes, the company said in a stock filing.
Hong Kong Express, which flies to destinations across Asia, will become a wholly-owned subsidiary of Cathay Pacific.
Cathay Pacific has been overhauling its business to cut costs, and returned to profit in 2018.
"We intend to continue to operate Hong Kong Express as a stand-alone airline using the low-cost carrier business model," a Cathay Pacific spokesperson said in a statement.
Hong Kong Express captures "a unique market segment" the spokesperson said, adding that the deal "represents an attractive and practical way for the Cathay Group to support the long-term development and growth of our aviation business".
The transaction is expected to be completed by the end of the year.