Rupert Murdoch's News Corporation has been given the green light to try to buy the remaining shares in BSkyB, but will be forced to spin out Sky News into a separate entity.
Culture Secretary Jeremy Hunt has okayed the controversial takeover, but a condition of his agreement is that Sky News is spun out of the deal into a separate company.
This is to assuage fears over "media plurality" or one person controlling too significant a portion of the nation's news sources.
"Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead," Hunt said.
"The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has."
That means that News Corp would continue to have a 39.1 per cent stake in Sky News new publicly listed company Newco, and an independent board and chairman.
Murdoch's takeover of Sky has been strongly opposed by major British media names including The Telegraph, Guardian and Daily Mail.
News Corporation already owns The Times, The Sun, News of the World and The Sunday Times.
"While News Corporation continues to believe that the proposed acquisition of the shares in BSkyB that it does not already own will not result in insufficient plurality for any audience in the UK, it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission," the company said in a statement.
The News Corp. Fox News channel – a US news offering – is also available in the UK.
News Corporation would still need to agree a price for the remaining shares, with suggestions that its current offering falls well short of that shareholders are asking for.