WASHINGTON ? The United States on Friday cleared the way for a merger between US carriers United and Continental that will create the world's biggest airline, officials and the airlines said.

"The department has closed its investigation into the proposed merger of UAL Corporation, the parent of United, and Continental," the Department of Justice said in a statement.

The DoJ ended its probe after the companies agreed to lease landing and takeoff rights at Newark International Airport in New Jersey to Southwest Airlines to avoid anti-trust concerns.

"The department conducted a thorough investigation," it added in a release that came one month after European regulators cleared the way for the merger, now expected to take place by October 1.

Shareholders must still vote on the plan. Both companies have scheduled special stockholder meetings on September 17, they said in a joint statement issued late Friday.

"We are pleased to have achieved this critical milestone and look forward to our respective stockholders' votes next month, following which we expect to be on track to close our merger by October 1st," said Glenn Tilton, UAL Corporation chairman, president and CEO.

Continental's chairman, president and CEO Jeff Smisek said the Justice Department's decision "is an important step on our journey of creating the world's leading airline" and "permits us to clear one of the last regulatory hurdles to closing our merger."

The new airline will fly under the United Airlines name and will hold around seven percent of global airline capacity.
It has a market value pegged at around $6.75 billion (5.2 billion euros).

The new airline will serve more than 144 million passengers per year with 370 destinations in 59 countries.

The two boards are hoping to generate combined annual savings and new revenues of up to $1.2 billion by 2013.

United and Continental both had a turnover of more than three billion dollars in 2009 but each reported losses.

Struggling with fallout from the worst recession in a generation, terrorism and costs brought on by an Icelandic volcano that forced the suspension of thousands of flights, airlines have been queuing up to join forces.

The deal follows Delta's 2008 takeover of Northwest and a British Airways tie-up with with Spanish carrier Iberia to avoid being sidelined by European rivals Air France-KLM and Lufthansa.

The merged giant will maintain United's base in Chicago as its headquarters.