The all-share deal includes a royalty agreement plus a cash payment by Bacanora of €1.35mln to cover a commitment already made for the project.
The deal is classified as reverse takeover and following completion Bacanora will end up with a 70% stake in Erris.
This will be diluted over time as Erris raises money to fund the development of Zinnwald and other projects.
Zinnwald is in 35kms from Dresden and in the heart of Europe's chemical and car industries, an area where there has been mining for 400 years.
Erris said it is the process of arranging a placing to fund the next stage of development and will change its name to Zinnwald Lithium PLC.
A definitive study indicated a net present value of €428mln and €58.5 mln average annual underlying profits over the life of mine, with a capital outlay of €159mln.
Solarworld, which is in administration, owns the other 50% of the Zinnwald deposit.
Bacanora said the sale will allow it to focus wholly on bringing its Sonora lithium project in Mexico into production.
Putting Zinnwald's ownership into a public vehicle will also allow access to capital markets in order to allow Erris to fast track the development, it said.
Peter Secker, Bacanora’s chieff executive, added "The Proposed Transaction ensures that the development of Zinnwald, which is strategically located in Germany with immediate access to the German and wider European automotive and downstream lithium chemicals industries, can be accelerated and Zinnwald will get the full attention it deserves.
“The Erris management team are of an extremely high calibre and we are confident that this is the best outcome for Bacanora's shareholders, who will in turn become indirect shareholders in Erris.”
Bacanora added samples provided by the pilot plant at Sonora are now being integrated into a plant design by partner Ganfeng, which is on track to deliver its final engineering packages at the end of 2020.
The miner posted a loss of US$4.7mln in the half-year to June with cash at the end of the period of US$44.3mln.