The Commerce Commission has approved the acquisition of a 50 percent stake in Vodafone by Infratil.
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The utilities investor sought clearance from the competition watchdog because it has a majority stake in Trustpower, which also provides some telecommunications services.
The Commission said it was satisfied that Infratil's investment in both companies would not lessen competition in the sector.
"While Trustpower has in the past been an aggressive competitor in residential broadband, with a particular focus on energy and broadband bundles, several other multi-utility providers have similarly emerged including Vocus, Nova Energy and Contact Energy," said Commission chair Anna Rawlings.
The Tauranga based Trustpower offers broadband, fixed and mobile phone services alongside electricity and gas supplies.
Ms Rawlings said there was enough competition in the regions as well as nationally where Trustpower operates.
The decision was made within the normal timetable, indicating the issue was regarded as a relatively simple decision.
Infratil has joined Canadian investment firm, Brookfield Asset Management, to buy Vodafone for $3.4 billion, and had hinted it would be willing to divest its Trustpower stake to ensure the deal was approved.
The British-owned Vodafone was sold because its parent company was restructuring after posting losses.