Unicaja has secured necessary approval from the Spanish government to advance with the proposed acquisition of local rival Liberbank.
According to a Reuters report, the transaction was approved by the Spanish Economy Ministry.
Unicaja expects the deal to close before the end of this month.
In a separate statement, Liberbank said that it expects to the deal to complete in the next few days.
Unicaja agreed to buy Liberbank for around €763m ($898m) in December, the news agency added. This came after an earlier deal to combine both the lenders failed following several months of negotiations.
The two banks resumed their discussions in October last year.
The merger will create the fifth-biggest domestic bank in Spain with total assets of around €110bn.
The combination secured shareholder nod in March and green light from competition watchdog earlier this month.
Once complete, the deal will further reduce the number of lenders in Spanish market to ten. Before the financial crisis of 2008, the country had 55 banks.
Earlier this month, another Spanish lender Caixabank reached an agreement with the unions to lay off a total of 6,452 employees. This was regarded as the biggest staff overhaul in Spanish banking history.
The redundancies will reduce Caixabank’s workforce in Spain by 14.5%.