New York Gov. Andrew Cuomo on Wednesday urged federal regulators to block KeyCorp's plan to acquire First Niagara Financial Group Inc, saying the merger would impede retail banking competition and cost thousands of jobs upstate.

The request, unusual for a sitting governor, came 3-1/2 months after Cleveland-based KeyCorp announced plans to buy Buffalo-based First Niagara for about $4.1 billion of cash and stock, in one of the largest U.S. bank mergers of recent years.

KeyCorp at the time said the combination would create the nation's 13th-largest commercial bank, with about $135 billion of assets, $99.8 billion of deposits and 1,366 branches in 15 U.S. states. It also projected about $400 million of annual cost savings, including from branch closures.

In a letter to the Federal Reserve, the Department of Justice and the Office of the Comptroller of the Currency, Cuomo said the merger should be rejected on antitrust grounds.

He said it would add to the tens of thousands of Buffalo-area residents who have difficulty accessing bank branches, and likely force many people to rely on costly alternatives such as payday lenders and check-cashing providers.

The merger "will, by any objective measure, further limit the ability of Upstate New York consumers to access the financial services and products offered by banks," Cuomo wrote. "If the acquisition application is not blocked, we will be forced to consider legal redress."

In a statement, KeyCorp said it has a "strong commitment to the communities of New York," and looked forward to working with Cuomo and his staff to address their concerns.

First Niagara declined to comment. Cuomo's office did not immediately respond to a request for further comment.

On a Jan. 21 conference call, KeyCorp Chief Executive Officer Beth Mooney said her bank had held "constructive dialogues" with upstate politicians critical of the merger, and was working to obtain antitrust approval from the Justice Department.

KeyCorp has said it expected the merger to close in the third quarter of this year.

In Wednesday trading, KeyCorp shares fell 12 cents to $10.52, and First Niagara shares fell 16 cents to $9.16.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Alan Crosby)