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Abu Dhabi's state-owned Etihad Airways says it has agreed terms and conditions for its purchase of a 49% stake in Italy's Alitalia.

In a , the two airlines said they would now move to finalise the deal "as soon as possible".

Alitalia, which has debts of about 800m euros ($1.1bn; £656m), voted on 13 June to accept Etihad's offer to invest in the company.

The deal still needs regulatory approval before it can go ahead.

For Alitalia the deal is seen as a way to reverse its troubled fortunes.

Last October, Alitalia approved plans for a 300m euro capital increase as part of a deal to fend off bankruptcy.

Prior to its 2008 privatisation it also received several state handouts.

The Italian airline said earlier this month that the Etihad investment was "an excellent outcome" and would "provide financial stability".

'Decisive steps'

Etihad said the deal would give more choice to air travellers into and out of Italy.

The firms did not give any details of the amount of money Etihad would invest. But Italy's transport minister Maurizio Lupi has said Etihad is prepared to invest up to 1.25bn euros over the next four years.

Mr Lupi said both Alitalia and Etihad had met with Alitalia's creditors on Tuesday where "decisive steps forward" had been made.

"It's increasingly clear that this marriage should happen because it's obvious to all that we are dealing with a strong industrial investment that will offer our airline concrete growth prospects," he added.

The two carriers have been in talks since December, but negotiations are reported to have been held back by Alitalia's reluctance to make job cuts part of the deal.