Greece's Piraeus Bank has reached an agreement to purchase the operations of troubled Cypriot banks in Greece for 524 million euros, the banker said.

The deal is being funded by the Greek bank bailout fund HFSF and has been aimed at protecting the struggling banking sector of Greece from the European debt crisis.

Under the deal, 312 local branches of three major Cypriot banks Cyprus Popular Bank, Bank of Cyprus and Hellenic Bank.

The deal is expected to make Piraeus the second-largest bank in Greece, with combined assets of 95 million euros, surpassing Alpha Bank which currently has the number 2 spot.