A combination of Raman scattering and cathodoluminescence techniques has been used to study the spatial distribution of Te precipitates in the volume of CdTe wafers. Starting with the as‐grown crystals with random distribution of precipitates over the whole volume, improvement at different stages of thermal annealing is demonstrated. As‐grown $p$‐CdTe wafers were annealed at 500–600°C either in Ga melt or in Cd vapor for 2 or 22 h. The kinetics of dissolution of Te precipitates was found to be similar for both the Ga melt and Cd vapor annealing processes. Short‐time annealing causes the disappearance of small Te precipitates, while the larger ones, 5–10 $\mu$m in size which decorate the extended structural defects, still remain. After a long‐time annealing, the complete disappearance of Te precipitates occurs in the wafers volume. Interestingly, it was observed that the disappearance of Te precipitates during annealing starts in the central part of the bulk wafer and is followed by a precipitate gettering at the wafer surface. This implies that it is possible to obtain precipitate‐free CdTe wafers by postgrowth annealing.