Nortel had said Nokia Siemens Networks -- a joint venture of Nokia and Siemens -- would offer $650 million for Nortel's CDMA and LTE wireless technology businesses and act as the stalking horse bidder.
In a bankruptcy auction a stalking horse typically sets the floor for bidding, and makes the lead bid at the bankruptcy auction. Nokia Siemens will have the right to match any higher offers.
The FTC, one of two agencies that assesses mergers for potential violations of antitrust law, put the approved deal on a list of OKed mergers that it issued on Tuesday.
The auction for Nortel is set for July 24 in New York and the deadline to submit bids is July 21. The deal is subject to bankruptcy court approval and a court hearing is set for July 28, according to court documents.
(Reporting by Diane Bartz, editing by Matthew Lewis)