Marking its foray into the security software arena, the Santa Clara, California-based Intel Corp., the world's largest chip maker, is working out a $7.7 billion acquisition for McAfee Inc., one of the most famous names in the cyber-protection space.

According to Intel, the acquisition – one of this year’s biggest technology deals - will allow the company to build McAfee’s anti-virus technology directly into its chips; thereby helping in the protection of computers, wireless devices, ATMs, and embedded systems in vehicles from online crime.

In a Thursday statement, Intel and McAfee said that the combination of the two companies will allow them to modify future Intel microprocessors in such a way that security features are made a part of the machines’ brains. The companies will begin releasing joint products in 2011.

In the opinion of other industry executives also, the Intel-McAfee partnership will pave the way for specially enhanced chips that could help encrypt data faster; thereby helping protect email privacy and authenticate the identity of the users when they boot up portable devices or tap into corporate networks.

As per Intel, the management of McAfee – which is also a Santa Clara-based company having 6,100 staff-members – will stay in place even after the takeover. Intel further added that, post acquisition, McAfee would “operate as a wholly owned subsidiary,” with no job losses.