Etihad Airways has officially acquired 49 per cent of Air Serbia, after receiving the necessary regulatory approvals.
The Abu Dhabi-based carrier was last summer awarded a five-year management contract for the Serbian national airline, then named Jat Airways (see news, August 1).
Etihad CEO James Hogan said: "I am pleased to confirm Etihad Airways is now the shareholder of 49 per cent of Air Serbia.
"This investment represents an important partnership with the government of Serbia, as we work together to build Air Serbia into the leading airline in the region."
Under the terms of the agreement, Etihad is providing a $40 million loan facility to Air Serbia, which will now be converted into equity.
This amount is being matched by an equal funding injection from the Serbian government.
Both parties have also promised to provide $60 million in further funding for Air Serbia.
The deal is an important step for Etihad as it will see the airline get a foothold in Europe, using Belgrade as a possible springboard for expanding its network across the continent.
Aleksandar Vucic, Serbia's deputy PM, said: "We are pleased to have closed the transaction with Air Serbia's strategic partner, Etihad Airways.
"Air Serbia is the only major airline in the region to have successfully partnered with a leading global airline, Etihad Airways. We are proud the national airline of Serbia now stands shoulder-to-shoulder with the best in the world."
And Air Serbia CEO Dane Kondic added: "Air Serbia has a strong business plan, and a clear government mandate, to be a safe, best-in-class and profitable airline.
"We have already achieved a remarkable transformation of the national airline of Serbia and are looking forward to the journey with our new shareholder and strategic partner, Etihad Airways."