By Rogerio Jelmayer And Christopher Bjork 

SÃO PAULO--Brazil's antitrust regulator approved, with some conditions, Spanish telecom firm Telefónica SA's purchase of Vivendi SA's Brazilian unit, GVT.

France's Vivendi agreed in September to sell GVT to Telefónica for 7.24 billion euros ($7.9 billion).

The approval from CADE, as the agency is known, was the last formal step for Telefónica to complete the purchase. Earlier this month, the Spanish company received approval from Brazil's telecommunications regulator, Anatel.

CADE conditioned its approval on the sale of Telefónica's 8.3% stake in Telecom Italia SpA. The Spanish company must also sell some debentures it holds in Telecom Italia.

Vivendi will have to sell its stake in Telefónica's Brazilian unit, Telefónica Brasil SA, CADE said.

With the acquisition, Telefónica cements its position as the dominant telecommunications firm in Latin America's biggest economy, reinforcing its broadband Internet and fixed-line telephone operations with GVT's assets.

Telefónica is paying Vivendi EUR4.66 billion in cash, which it will raise with a capital increase at Telefónica Brasil.

The Madrid-based parent company, which owns 74% of its Brazilian unit, will first raise EUR3 billion by issuing new shares itself.

Vivendi is also receiving a stake in Telefónica Brasil and shares in Telecom Italia SpA as part of the agreement.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and Christopher Bjork at christopher.bjork@wsj.com

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