Fastjet aims to begin domestic South African services by the end of May under a new partnership with investment firm Blockbuster and charter operator Federal Airlines.
The commercial agreement comes one day after South Africa's Business Day reported that Fastjet's earlier attempt to take over Johannesburg-based 1time Airline had been abandoned.
The pan-African low-cost carrier has instead signed a memorandum of understanding (MoU) with Blockbuster - which is backed by high-profile local investors including Edward Zuma, the son of South Africa's president - with the objective of launching domestic flights on 31 May.
Johannesburg-Cape Town will be the launch route for the new venture, which is expected to be 75% owned by Blockbuster and 25% owned by Fastjet.
Previous attempts to enter the South African market through the acquisition of defunct operator 1time had encountered difficulties due to foreign ownership laws in the country, Fastjet operations director Rob Bishton told Flightglobal in January.
Announcing the new agreement, Fastjet chief executive Ed Winter says: "Though we have been in talks with a number of companies regarding licensing arrangements, we have ultimately decided that in order to best serve South African customers, we should invest not in the past, but in the future.
"Fastjet sees a strategic gap in the South African marketplace for a pan-continental, low-cost airline operating the yield-management model required to keep fares affordable for passengers, not just at launch, but also in the long term."
The airline says it has received legally binding commitments to raise £2 million ($3.05 million) through the issuance of 160 million new ordinary shares at a price of 1.25 pence per share.
The new shares will rank pari passu with existing ordinary shares of Fastjet, which were down 17.5% at 1.65p in afternoon trading on 24 April. The airline's share price has lost 65% of its value since January, largely due to an ownership dispute with subsidiary Five Forty Aviation.
FastJet said on 23 April that it had signed an MoU with Five Forty Aviation chief executive Don Smith to suspend legal proceedings and resume co-operation.