Old Telstra and Optus pay-TV cables will be used to roll out the National Broadband Network quicker and cheaper, Communications Minister Malcolm Turnbull says.
In a bid to roll out the NBN four years sooner and save about $30 billion, NBN Co will take progressive ownership of Telstra and Optus' HFC cable network, first installed to supply subscription TV in the 1990s, he said.
Under a previous deal with the government, Telstra was being paid to close its HFC network down.
Mr Turnbull said the acquisition is coming at no additional cost to taxpayers.
"This should be seen as a win-win," Mr Turnbull said.
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"A win for the tax payer, a win for consumers and a win for Telstra share holders."
NBN Co CEO Bill Morrow said the deal will bring down the overall cost of building the network.
"What's more, making use of technologies such as HFC - rather than decommissioning them - enables Australia to capitalise on the significant investments being made globally in broadband technology," he said.
So far more than 309,000 premises are connected to the NBN, and it is set to be complete for 3.3 million Australian homes by June 2016.
Telstra will continue to deliver pay TV through the HFC network after negotiations with NBN co.
Telstra CEO David Thodey said the company had retained shareholder protections in the new deal.
"(We have) also negotiated new protections for shareholders in lieu of the protection that our continued ownership of the copper and HFC network assets provided under the original agreement."
Opposition communications spokesman Jason Clare said the deal was "second rate" and would hold Australia back.
"This is a copper nail in the coffin of the NBN," Mr Clare said.
"It's a second rate copper version of the NBN."
The government would need to spend billions of dollars over the next decade to keep it working, he said.
