The deal is still subject to regulatory review in the United States and China.
Financial terms were not announced. A person familiar with the deal said earlier on Friday that the Hummer business would be sold for about $150 million.
Under the deal, Lumena Resources Corp <0067.HK> chairman and founder Suolang Duoji would hold 20 percent of the investment vehicle buying Hummer.
Tengzhong would hold the remaining 80 percent.
The Hummer sale is part of a drastic restructuring plan by GM, which also involves the disposal of its Saab, Opel and Saturn operations as part of a U.S. government-sponsored restructuring.
Tengzhong, a little known heavy machinery maker, has been in detailed negotiations with GM since it announced an initial plan in June to acquire the premium off-road Hummer brand.
Through September, Hummer's U.S. sales were down 64 percent this year.
The brand's sales peaked in 2006 but have been hit hard since by higher gas prices and a shift in U.S. consumer tastes away from Hummer's heavy-duty SUVs and its military-derived styling.
Credit Suisse has been the financial advisor to Tengzhong. Shearman & Sterling has been the Chinese company's legal advisor.
Citi was financial advisor to GM.