The UK government will let 21st Century Fox take over Sky if it sells Sky News.
Culture Secretary Matt Hancock has referred Fox's bid for a further consultation, but has also cleared Comcast's rival bid to take over Sky.
The decision paves the way for a bidding war worth billions of dollars between Comcast and Fox to complete a takeover of Sky.
Fox has been chasing approval from UK regulators since 2016 to buy the 61% of Sky it does not already own.
The takeover was held up by politicians and regulators who feared it could give Rupert Murdoch too much influence over the media in the UK.
The Murdoch-controlled Fox has been attempting to address those concerns through a series of concessions, including selling Sky News to Disney once the deal is complete.
Separately, Disney has struck a deal to buy Fox's entertainment assets, including its stake in Sky.
However, US media giant Comcast waded into the bidding in February with a £22bn offer for Sky, trumping Fox's offer, which valued the broadcaster at £18.5bn.
Mr Hancock said he needed to be confident that the final undertakings ensured the continuation of Sky News's long-term financial viability, and that it could continue to operate as a major UK-based news provider making independent editorial decisions.
"As a result, I have asked my officials to begin immediate discussions with the parties to finalise the details with a view to agreeing an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long-term," he said.
"I am optimistic that we can achieve this goal, not least given the willingness 21st Century Fox has shown in developing these credible proposals.
"However, if we can't agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach."