ANZ's pursuit of the business under a deal worth up to $5 billion has been rocky after the competition watchdog last year rejected the deal first proposed in 2022.
"This decision comes after careful consideration, much deliberation and consultation, and a long and thorough process," Treasurer Jim Chalmers said on Friday.
"This was an on-balance call, consistent with advice I received from Treasury and regulators and following nearly two years of scrutiny and input from industry, the Finance Sector Union, the Queensland government and other stakeholders."
Jim Chalmers says the sale will include strict conditions to protect customers and staff. (Mick Tsikas/AAP PHOTOS)
The Australian Competition and Consumer Commission had knocked back the deal after raising concerns it would further cement the market dominance of the big four banks.
ANZ then appealed to the independent Australian Competition Tribunal, a move Suncorp supported.
The tribunal concluded it would not be likely to substantially lessen competition.
On Friday, Dr Chalmers said the deal would be subject to strict conditions to protect the national interest.
The legally binding conditions would ensure Australians continued to have access to vital banking services, "employees aren't left behind, and Queensland and Australia benefit from the transaction".
These include banning ANZ from closing Suncorp Bank branches in Queensland and ANZ regional branches for three years and requiring ANZ to "make every effort" to join Australia Post banking services.
ANZ also agreed to no net job losses for three years as a result of the transaction and to "proper engagement" with employees and the Finance Sector Union.
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