Qantas has been the focus of speculation for the past month

The Qantas board unanimously recommended that shareholders accept A$5.60 a share from a private equity consortium including Macquarie Bank.

Thursday's move comes after the airline rejected an initial A$5.50 offer earlier in the week.

Qantas chairman Margaret Jackson said it was a "momentous day" for the firm.

Shares in the airline ended Thursday trading up 3.73% to A$5.28 following the announcement.

Foreign limits

In addition to Macquarie Bank, Australia's largest investment bank, the Airline Partners Australia takeover consortium also includes Australian finance company Allco, US firm Texas Pacific Group, and Canada's Onex.

I hope that the Qantas we know is the Qantas we keep Australian PM John Howard

The deal has been structured so that it meets Australian rules which limit foreign ownership of Qantas to 49%, with each foreign business only allowed a 25% share.

Allco's stake in the consortium is 46%, while Macquarie and Texas Pacific both have 15%, Onex 9% and other unnamed foreign investors also 15%.

The takeover still needs approval by Australian regulators and Qantas shareholders, but the consortium has already pledged not to cut services.

"Qantas will retain the current Australian management and their growth strategy, a strategy that does not involve a break up of the airline, cuts to regional services, or the movement of maintenance operations overseas," said Airlines Partners Australia director Bob Mansfield.

Despite suffering from the steep increase in fuel prices in recent years, Qantas remains one of the few global carriers to make a profit.

Australian Prime Minister John Howard said he wanted the airline to maintain its traditional character.

"I hope that the Qantas we know is the Qantas we keep," he said.

"People like Qantas, it is an icon."