The Irish government has agreed to sell its 25% stake in Aer Lingus to International Airlines Group, the owner of British Airways and Iberia.

IAG offered to buy the Irish carrier in January but faced the prospect of being blocked by the Irish authorities.

Its proposed €1.36 billion (£96 million) bid has been recommended by the Irish airline’s board but still requires the support of Aer’s other main shareholder, Ryanair which itself tried to buy Aer Lingus.

A statement issued after the Irish cabinet meeting said: “IAG has provided additional information and certain commitments in relation to its proposal. The government has decided that it will support IAG’s proposal.”