While Cisco already owns a minority stake in Ayr, the buyout would see Cisco offering company stock worth up to $113m (£71.6m) for the other outstanding shares of Ayr, according to a statement released by Cisco.
Ayr's 30 employees would move to Cisco, with Ayr's chief executive officer Tom Grennan set to join the company's Internet Technologies Division.
The deal has already been approved and is now subject to other closing conditions and approvals. Cisco expected the buyout to be completed in the first quarter of its financial year 2003.
Ayr's technology would be integrated into the Cisco IOS software that powers the company's routers and switches. The acquisition would also enhance Cisco's ability to integrate software from multiple sources into its products, the company said.