Confirming widely reported rumours, Toshiba said it had agreed to take the entire equity of the firm, a global leader in energy management solutions for utilities.
"The acquisition, valued at $2.3 billion including net debt, will substantially enhance the scope of Toshiba's smart grid and smart community businesses," the Japanese company said in a statement.
Smart grids are intelligent power distribution systems seen as key for both advanced and emerging nations to use energy more efficiently.
Toshiba aims to offer one-stop solutions for power monitoring and management by combining its expertise in energy management with Landis+Gyr's advanced smart metering technologies, services and customer base.
Toshiba said it hoped to strengthen its smart grid operations, with the global market for the environmental technology expected to rise six-fold to 5.8 trillion yen ($71 billion) in the next 10 years.
It said it would aim to achieve net sales of 700 billion yen in the smart grid and smart community operations in the year to March 2016, more than doubling current annual sales of 300 billion yen.
Toshiba, which bought the US nuclear plant builder Westinghouse Electric in 2006, is a major global player in nuclear power.
Landis+Gyr, as a Toshiba subsidiary, will continue its existing operations and maintain its employees, the Japanese firm said.
The Swiss company will continue to try to increase its share in the expanding Chinese, Indian and Brazilian markets while also aiming to earn more business in Europe and the United States.
Toshiba said the deal's impact on its earnings for this year to March was yet to be decided.
But considering Toshiba's group revenue of 6.399 trillion, or $79.22 billion, Landis+Gyr will not have a significant impact on Toshiba's earnings in the short term, Dow Jones Newswires said, citing analysts.
Landis+Gyr generated sales of around $1.5 billion last year and employs about 5,000 people.
At the Tokyo Stock Exchange, Toshiba fell 3.36 percent to 431 after spending most of the day in negative territory.