The share purchase agreement will cost Fairfax $64m.
Pacific, established in the 1950s when it was the Malaysian business arm of the Netherlands Insurance Company.
On closing, Pacific will join the Fairfax Asia group under the oversight of Fairfax Asia's CEO, Ramaswamy Athappan.
Pacific has approximately RM120m in its shareholder fund. The company has a national network across Malaysia with 18 branches, over 200 employees and an agency force of approximately 1,200 agents.
The transaction is subject to the approval of the shareholders of the vendor, PacificMas Berhad, the transaction is expected to close in the first quarter of 2011.
Pacific chairman and CEO Prem Watsa said Pacific has a strong presence in the Malaysian insurance sector and the company look forward to working with Pacific's excellent management team, led by its CEO Sonny Tan Siew Hock, to further develop their business and products.
Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.