German flag-carrier Lufthansa has secured conditional competition approval for its acquisition of Austrian Airlines.
The European Commission says competition regulator Neelie Kroes has "instructed her services to draft a conditional clearance decision".
It follows "further improved remedies" from Lufthansa aimed at convincing the Commission to accept its planned takeover of the Austrian flag-carrier.
The draft decision will be submitted to an advisory committee for the European Union member states and a final proposal will then be presented "as soon as possible" for adoption.
Details of the concessions put forward have not yet been disclosed. Lufthansa simply says it "amended its last offer" after "intensive" talks with the Commission and market tests of the airline's proposals.
Lufthansa, which had been battling to secure clearance by today, had been forced to extend the deadline for the takeover to the end of August.
But chief executive Wolfgang Mayrhuber says the carrier welcomes the "positive signals" from the Commission.
"In taking this course, the Commission underlines its strategy to give the European airline industry a chance to persist amid global competition," he adds.
"A prompt go-ahead for the merger is essential for Austrian Airlines, Vienna Airport and all the partners involved in air traffic to obtain planning security and to undertake the necessary measures resolutely."
Lufthansa has yet to obtain approval for the funding support which the carrier is also seeking as part of the tie-up deal.
Austrian Airlines says it is "highly probable" that the acquisition will be formally concluded in August, or September at the latest.
"We have worked hard to make this privatisation happen, and are happy the way is now clear for it to go ahead," says Austrian executive board member Andreas Bierwirth.
Lufthansa Group has a "huge amount of power", he adds: "This power will be a huge help to us, particularly once markets have normalised again.
"But it will be up to us, and us alone, to pull the right levers to ensure we can transform that power into the required speed and altitude. We will need to do our homework."