Serbia's competition regulator has approved the acquisition of a 49% shareholding in Jat Airways by Middle Eastern operator Etihad Airways.
Etihad will have certain management powers, says the regulator, while the Serbian government will retain the majority share of 51% in the carrier.
"It was determined that implementing the combination does not lead to a significant prevention, restriction or distortion of competition in the relevant market," says the regulator's ruling.
Under the investment programme the two sides will create a new airline, Air Serbia, to succeed Jat Airways. The Belgrade-based carrier will operate a fleet of Airbus A319s.