Spanish SkyTeam member Air Europa will launch new non-stop service between Madrid and Montevideo from 3 June.
The carrier announced the new flight with the Uruguayan Ministry of Tourism at a tourism trade show this week in Madrid.
The Uruguayan government has been looking for a replacement for Iberia, which plans to slash Montevideo from its network from April after declaring the destination unprofitable.
Initially, Air Europa will operate on the route three times weekly in June using Airbus A330s.
Iberia is currently operating six weekly frequencies to the Uruguayan capital. However, after determining in its strategic restructuring plan that it would continue operating only to destinations which can sustain at least a daily flight, it decided to drop Montevideo from its network.
Uruguay's minister of tourism Liliam Kechichian, said that the Madrid link is "strategic" for the country and maintaining its only nonstop route to Europe is crucial.
Air Europa has already announced plans to increase frequencies to La Havana and the Dominican Republic. Starting 1 April, Air Europa will increase the frequency of flights to the Cuban capital from its daily to 10 weekly, while Santo Domingo will get a second daily flight. Flights to Punta Cana will increase from four weekly to daily.