Google has agreed to acquire email security company Postini for $625 million (£310 million).

Postini provides solutions in email security, archiving, encryption and policy enforcement for email, instant messaging and other web-based communications to more than 35,000 businesses and 10 million users worldwide.

The California-based company will become a wholly-owned subsidiary of Google, subject to working capital and other adjustments, according to the internet giant.

Google hopes the acquisition of Postini will encourage more large businesses to use its hosted applications, including Gmail, Calendar, Talk and Docs & Spreadsheets.

“The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day,” said Dave Girouard, vice president and general manager of Google Enterprise. “At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance. By adding Postini products to Google's technology, businesses no longer have to choose.”

The deal is expected to close by the end of the third quarter.