NEW YORK — CenturyLink on Monday agreed to merge with Level 3 Communications in a $25 billion deal that would create one of the largest communications providers for businesses.

The combined company would have about 500,000 route miles of fiber that carry broadband, video, and voice that enable corporations to communicate. It would also produce about $19 billion in annual revenue on a pro forma basis.

Under the terms of the deal, Century­Link, based in Monroe, La., will acquire Level 3 for $26.50 in cash and 1.4286 shares of Century­Link stock for each Level 3 share, according to a statement issued by the companies Monday.

Based on the closing price of Century­Link’s shares from Friday, this represents a price of about $69.92 a share. Including Level 3’s $10.9 billion in debt, the transaction amounts to about $36 billion. That represents a premium of almost 50 percent from Level 3’s share price Wednesday, before reports surfaced of a potential deal.

CenturyLink’s shareholders will own 51 percent of the combined company, while Level 3’s will hold the rest.

“This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses,’’ Glen F. Post III, Century­Link’s chief executive and president, said in a statement.

Post would continue to serve in his executive role of the combined company.

Shares of CenturyLink closed down 12.54 percent at $26.58, while shares of Level 3 were up 3.9 percent to $56.15.

The transaction would significantly lower CenturyLink’s tax expense over the next few years. Level 3 has almost $10 billion of so-called net operating losses, a tax relief generated from unprofitability.

The companies said they plan to achieve about $975 million a year in cost savings by eliminating duplications and improving operations.

The combined company would be based in Monroe, where Century­Link was founded in 1968, but retain offices in the Denver area, where Level 3 has its headquarters.

The companies expect to complete the transaction by the end of September of next year, subject to approvals by the Federal Communications Commission, certain states, and the majority of both companies’ shareholders.