Athens - The European Commission Tuesday approved the sale of Greece's national carrier Olympic Airlines to the Marfin Investment Group after years of failed privatisation attempts.

The deal involving Marfin, a Greek-based investment holdings company, comes a month after the conservative government made a last- minute appeal for investors to rescue Olympic, after an international tender failed to produce satisfactory offers.

Bids by two other companies for the ailing airline, Aegean Airlines and US-based Chrysler Aviation, were rejected.

European Commission Transport Minister Antonio Tajani said the new airline would be much smaller, and the deal was carried through at market prices through direct negotiations.

Analysts in Athens said the deal, which was announced by the Greek government on Friday, will earn the state a total of 177 million euros.

"The government accepts with the greatest satisfaction the announcement by the European Commission," said Development Minister Costis Hatzidakis.

"The effort to privatise Olympic has taken place during a difficult economic climate, and today's decision by the EU shows that the effort has firm foundations."

Founded in 1957 by shipping magnate Aristotle Onassis, Olympic steadily declined after being operated for decades by the state, with reported losses of 450 million euros a year.

The government has spent years seeking private investors to take over the airline, but the process has been complicated by the European Commission's demand that the company repay unlawfully distributed state aid.

The last attempt to privatize the airline was September 2008, when the government floated a tender to split the loss-making airline into three units - flying, ground handling and aircraft maintenance - to facilitate a sale.

The government has said that it intends to transfer the majority of Olympic's more than 8,000 staff to other public sector jobs. (dpa)