Google Inc. said it will buy telephone hardware maker Motorola Mobility Holdings Inc. for $12.5 billion in cash to bolster the adoption of its Android mobile software, Reuters reported.

In its biggest deal to date, Google said it would pay $40 per share, a 63 percent premium to Motorola Mobility’s closing price last Friday on the New York Stock Exchange.

Google, maker of the Android mobile phone operating system software, has been forging ahead in the smartphone market but has been hampered by a lack of intellectual property in wireless telephony.

Earlier this month, fresh from losing a bid to buy thousands of patents from bankrupt Nortel Networks Corp., Google’s chief legal officer blasted Microsoft Corp., Apple Inc.,  Oracle Corp. and “other companies,” accusing them of colluding to hamper the increasingly popular Android software by buying up patents.

The Motorola Mobility deal may represent a victory for activist investor Carl Icahn, Motorola’s biggest shareholder. He has urged Motorola to consider splitting off its patent portfolio to cash in on surging interest in wireless technology. As of July, Icahn held an 11.36 percent stake in the company.

Google said the deal will close in late 2011 or early 2012 and that it will run Motorola Mobility as a separate business.