Alitalia and Etihad Airways have received merger clearance from the European Commission.
They can therefore proceed with the proposed strategic partnership which was announced in August.
Following the completion of its review, the European Commission today confirmed that the partnership complies with the European regulations on competition.
Etihad president James Hogan said: “We are delighted to be able to move forward with this process and look forward to a positive outcome and the final conclusion of our transaction with Alitalia.
“An equity investment in Alitalia will be beneficial not only for the both airlines, but, more importantly, it will give more choice and broader travel opportunities to business and leisure travellers into and out of Italy.”
In line with previous cases, the airlines undertook commitments aimed at facilitating the entry of new airlines on the Rome to Belgrade route.
The parties continue to work together with a view to completing the transaction before the end of the year.
Gabriele del Torchio, chief executive, Alitalia, said: “This is an excellent outcome for Alitalia.
“This investment will provide financial stability and a foundation for impressive long-term growth for the Company and for the travel and tourism industry in Italy, in which Alitalia is a fundamental player.
“Today’s decision by the EU approves the largest ever foreign investment in Alitalia and demonstrates huge confidence in the future of the national carrier.”