Fairfax Media and Macquarie Radio Network have agreed to merge their radio businesses.
The merger will unite top-rating radio talk stations 2GB in Sydney, which is owned by Macquarie, and Melbourne's 3AW, which is owned by Fairfax.
The joint venture will also consolidate the operations of another five radio stations across Australia: 2UE in Sydney, Magic 1278 in Melbourne, 4BC and Magic 882 in Brisbane and 6PR in Perth.
Due to regulatory requirements, Macquarie Radio will divest 2CH and the Macquarie Regional Radio network.
The merger does not include the 96FM station in Perth, which Fairfax Media has sold to APN News and Media for $78 million.
96FM will be integrated into APN's Australian Radio Network.
Macquarie Radio will acquire 100 per cent of the shares of Fairfax Radio in return for about 93.2 million new shares in Macquarie Radio and a cash payment of about $18 million.
Upon completion of the merger, Macquarie Radio shareholders will have a stake of 45.5 per cent in the new entity, and Fairfax 54.5 per cent.
The current executive chairman and chief executive of Macquarie Radio Network, Russell Tate, will head the merged operations as executive chairman for an interim period of 12 months.
"The combination of the two networks will unlock significant cost and revenue synergies, and provide national advertisers with ease of access to the increasingly important 45-69 year demographic which all seven stations in the combined group attract," Mr Tate said on Monday.
Macquarie Radio's current major shareholder, John Singleton, said the merger represented a win for both radio networks.
Macquarie Radio shareholders must approve the merger, and a meeting of shareholders is expected to be held in March.
The merger is also subject to approval from the Australian Communications and Media Authority and the Australian Competition and Consumer Commission.
Fairfax and Macquarie Radio confirmed last week that they were discussing a transaction, just 10 months after John Singleton publicly criticised senior Fairfax executives after merger talks between the two firms broke down.
In 2011, Fairfax unsuccessfully tried to offload its radio stations due to a lack of acceptable offers.
Revenue in Fairfax Radio dropped six per cent in 2013/14.
Shares in Fairfax were 0.25 at 83.25 cents at 1204 AEDT.
Macquarie Radio was two cents higher at $1.34.
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