German carrier Lufthansa is expected to receive European Union regulatory approval on Friday for its planned takeover of ailing Austrian Airlines (AUA), a source said on Thursday.

The (European) Commission's decision will likely be issued on Friday. Clearance will be given subject to conditions, the source close to the transaction told Reuters.

The source declined to give details of the remedies proposed by Lufthansa to address EU competition concerns. Another source had earlier told Reuters the airline would cede some key take-off and landing slots in Vienna to rivals.

The Commission said it had no comment.

EU Competition Commissioner Neelie Kroes said last month Lufthansa's acquisition of AUA was likely to be approved after the German company managed to allay competition concerns.

Austria's Takeover Commission last month extended to Aug. 31 a deadline for Lufthansa's takeover.

Lufthansa shares were flat at 11.19 euros in mid-session, outperforming a 0.32 percent lower German blue-chip index. Austrian Airlines stock was 0.45 percent lower at 4.38 euros.

(Reporting by Foo Yun Chee, editing by John Stonestreet)