[CAMmando]

If you dont have a CAM system amd your machine doesnt have a canned cycle for this, you want to make sure your machine supports Helical Interpolation. This is often an option in the controller that may or may not be activated (depending on what option package you purchased),

With Helical interpolation, You use G2 or G3 with a Z value. If the machine accepts 360 degre G2/G3 moves, then each Z is equal to the pitch. If the machine requires you to break the G2/G3 moves into quatrants, the Z is devided accordingly. Use cutter compensation so yopu can sneak up on the size. If the hole is blind it is sometimes desireable to start at teh bottom of the hole and interpolate up. With the size of your hole this probably isnt neccessary. Chatter is usually the result of not enough feed rather than too much. I think that ADVENT link above has some good tech data.

If your machine doesnt have helical interpolation, you need a CAM system to linearize the motion for G01 moves.

As far as what tool to use, there are many so look into what has been suggested so far. If you can find a hungry sales rep, maybe he will come in and get you going on the machine.