The European Commission has cleared Microsoft's acquisition of the devices and services division of Finland's Nokia.
The decision follows approval of the $7 billion deal by the US Federal Trade Commission over the weekend. With the two regulatory approvals, the deal is now clear to be completed.
The European Commission said it was granting approval for the deal because a combination of Nokia's handset and smartphone business with Microsoft wouldn't substantially harm competition.
"There are only modest overlaps between the parties' activities and the links between Microsoft's mobile operating systems, mobile applications and enterprise mail server software with Nokia's smart mobile devices are unlikely to lead to competitors being shut out from the market," the commission said.
The two companies announced plans for the acquisition in early September with Microsoft CEO Steve Ballmer calling it "a bold step into the future" for his company.
Both Microsoft and Nokia have been closely collaborating on smartphones running Microsoft's new Windows Phone operating system. Nokia is Microsoft's biggest Windows Phone partner - a partnership that will be cemented by the deal.
Both companies expect the acquisition to close in early 2014.
Nokia CEO Stephen Elop will return to Microsoft and run the company's expanded devices team.