Abu Dhabi’s state-owned Etihad Airways has confirmed it has agreed terms and conditions for its purchase of a 49 per cent stake in Alitalia.

In a joint statement, the airline said it would now move to finalise the deal for the Italian flag-carrier “as soon as possible”.

Alitalia stakeholders voted on June 13th to accept the Middle Eastern carrier’s offer to invest in the company.

The deal still needs regulatory approval before it can go ahead.

For Alitalia, which has debts of about $1.1bn, the deal is seen as a way to reverse its troubled fortunes.

Prior to its 2008 privatisation, the carrier received several state handouts.

The Italian airline said earlier this month that the Etihad investment was “an excellent outcome” and would “provide financial stability”.

Etihad – which is considered the World’s Leading Airline by the World Travel Awards  - said the deal would give more choice to air travellers into and out of Italy.

The two carriers have been in talks since December, but negotiations are reported to have been held back by Alitalia’s reluctance to make job cuts part of the deal.

No financial details of the transaction were released.