Santander said its consumer finance subsidiary will buy 51 percent of Financeira El Corte Ingles for €140 million ($190 million).
El Corte Ingles, a household name in Spain which was founded in 1940, is under pressure from creditors to sell assets and unload €5 billion in debt.
Last year, the store's financing unit lent out €6.6 billion and generated €168.4 million in revenue.
The department store saw its sales fall 8.0 percent in 2012 over the previous year to €14.5 billion despite slashing prices, especially on food and clothes, at a time when one in four Spaniards is out of work.
"The agreement will allow Santander to strengthen its leading position in the European consumer finance market and will make its Spanish and Portuguese portfolios more diversified, thanks to the complimentary nature of Financeira El Corte Ingles," Santander said in a statement.
The bank said it expects the deal, which must be approved by the European Commission, the Bank of Spain and the Bank of Portugal, will be completed in the first quarter of 2014.