The Australian government on Thursday approved Qatar Airways' move to buy a 25% stake in Virgin Australia from U.S. private equity firm Bain Capital saying the deal would deliver more international flights and support jobs.

Treasurer Jim Chalmers has given the green light for Qatar Airways to buy a 25% stake in Virgin Australia, as part of a strategic alliance. The deal will shake up the Australian aviation market.

Qatar Airways Ltd.’s acquisition of a 25% stake in Virgin Australia can proceed subject to enforceable conditions, Australian Treasurer Jim Chalmers said, adding the deal would improve competition in the country’s highly-concentrated aviation sector.

Australia on Thursday approved Qatar Airways buying a 25% stake in Virgin Australia from U.S. private equity firm Bain Capital, posing a challenge for national flag carrier Qantas that has long dominated Australian air routes.

The deal will open new routes for travellers and is expected to provide a long-term pathway for Virgin Australia to operate its own long-haul flights.

Qatar's minority 25 per cent stake in Virgin Australia has been approved by the Federal Government with VA long-haul flights to Doha starting on 1 June.

(Reuters) - Australia's Treasurer Jim Chalmers approved Qatar Airways' proposal to buy a 25% stake in Virgin Australia, the Australian Financial Review reported early on Thursday.

Passengers and the aviation industry are expected to benefit from improved competition after a deal between Qatar Airways and Virgin Australia was approved.