The European Commission has approved a deal to give Britain's biggest insurer, Aviva, a 75 per cent share of Ark Life Assurance, now owned entirely by AIB.
The parties say their five-year renewable deal is a joint venture, while the Commission called it an acquisition by Aviva.
"The European Commission has cleared ... the proposed acquisition of Ark Life Assurance Co by Aviva," the Commission said in a statement.
It added that the deal did "not significantly impede effective competition in the (European Economic Area) or any substantial part of it."
AIB would get a cash payment of up to €204 million and retain a 24 per cent interest in Ark through its bank assurance unit.
Aviva's Irish subsidiary Hibernian Life & Pensions would take over Ark, making the combination the third-largest player in Ireland's long-term savings market.
Hibernian is now third and Ark fourth. The combined companies would have a market share of around 19 per cent, compared with Bank of Ireland at 24 per cent and Irish Life at 25 per cent, Aviva executive director Philip Scott said when the deal was announced.
The new operation will employ 800 people and sell life insurance and pensions.