Bell will, however, keep eight of Astral's TV channels including the Movie Network, which includes HBO Canada, and TMN Encore as well as the French-language SuperEcran, CinePop, Canal Vie, Canal D, VRAK TV, and Z Tele.
The Competition Bureau said without the sale of Astral's (TSX:ACM.B) pay and specialty television channels the deal would likely have led to higher prices and reduced choice for television programming.
"Consumers who pay for television programming are looking for greater choice, more innovative product offerings, and reasonable prices," said John Pecman, interim competition commissioner.
"Today's agreement is essential to preserving choice for consumers and ensuring continued and effective competition in this area."
The proposed deal is still subject to review by the CRTC. The broadcast regulator rejected the deal last year, but Bell has since revised its proposal in hopes a revamped proposal will be approved.
Corus Entertainment chief executive John Cassaday called the deals transformative for his company. Corus (TSX:CRJ.B) will buy the 50 per cent ownership interest in Teletoon and two Ottawa-based radio stations, CKQB-FM and CJOT-FM that it does not already own from Bell.
In addition, Corus has also signed a deal with Bell and Shaw Media to buy each of their respective 50 per cent interests in the French-language specialty channels Historia and Séries+.
Seperately, Corus has signed a deal with Shaw Media to buy the remaining 49 per cent stake in ABC Spark. As part of the agreement, Corus will sell its 20 per cent stake in Food Network Canada to Shaw Media.
"The consolidation of Teletoon and the addition of the popular services Historia and Séries+ give Corus the scale to expand into the growing French-language specialty television market," Cassaday said in a statement.
"As a well-capitalized company, Corus can contribute to the growth of this market and provide new opportunities for the production community, while adding greater diversity to the system and more choice to French-speaking audiences."
Corus said the combined acquisition price for the assets was $494 million.
In addition, Bell said it will also sell the English-language Family including Disney Junior English and Disney XD services, and the French Disney Junior, Musimax and MusiquePlus services.
The approval by the Competition Bureau also includes restrictions on Bell that prevent imposing restrictive bundling requirements on any provider seeking to carry the Movie Network or Super Ecran.
"This positive news from the Competition Bureau is a major step forward in uniting Astral and Bell Media and delivering on our promise to grow investment and competition in Canadian broadcasting," said George Cope, president and chief executive of Bell corporate parent BCE Inc.
"This decision preserves the tremendous value the transaction represents to consumers, the Canadian media community, and Astral and Bell shareholders."
Eamon Hoey of Hoey Associates said the Competition Bureau ruling will make it more difficult for the CRTC to ultimately reject the deal, even though it turned it down last year.
But he said he himself has not changed his mind that it puts too much media control in the hands of one corporation.
"My view is it's bad for the country and it's bad for consumers. We have far too much concentration in the ownership of the media," he said, adding he would prefer that Bell used its clout to expand in its core telecom business rather than "wandering in and out" of non-related holdings.
The CRTC is expected to announce a decision on new public hearings this week.
Bell corporate parent BCE Inc. has said it expects that its new proposal to buy Astral Media will address the federal regulator's concerns.
When the CRTC killed the deal last year, it said the acquisition wasn't in the best interests of Canadians and would have resulted in an unprecedented level of concentration in the Canadian marketplace.
Astral has 25 specialty TV services, including the Movie Network, Family Channel and Disney XD, and 84 radio stations.
Bell, owner of the CTV TV network, has said it wants to put Astral's content on smartphones, tablets, computers and traditional TVs, and to compete with foreign online competitors such as Netflix.