The big four bank's pursuit of the business under a deal worth up to $5 billion has been rocky after the competition watchdog last year rejected the deal first proposed in 2022.
"This decision comes after careful consideration, much deliberation and consultation, and a long and thorough process," Treasurer Jim Chalmers said on Friday.
Dr Chalmers said the decision is an "on-balance call" consistent with the advice received from treasury, regulators, industry and other stakeholders.
Jim Chalmers says the sale will include strict conditions to protect customers and staff. (Mick Tsikas/AAP PHOTOS)
The Australian Competition and Consumer Commission had knocked back the deal after raising concerns it would further cement the market dominance of the big four banks.
ANZ then appealed to the independent Australian Competition Tribunal, a move Suncorp supported.
The tribunal concluded it would not be likely to substantially lessen competition.
On Friday, Dr Chalmers said the deal would be subject to strict conditions to protect the national interest.
The legally binding conditions would ensure Australians continued to have access to vital banking services, "employees aren't left behind, and Queensland and Australia benefit from the transaction".
These include banning ANZ from closing Suncorp Bank branches in Queensland and ANZ regional branches for three years and requiring ANZ to "make every effort" to join Australia Post banking services.
ANZ also agreed to no net job losses for three years as a result of the transaction and to "proper engagement" with employees and the Finance Sector Union.
The deal is also subject to lending commitments, with ANZ told to provide $15 billion towards Queensland's renewable energy projects and the 2032 Olympics preparations.
The bank also is required to lend $10 billion for bioenergy and hydrogen projects over 10 years and $10 billion for Queensland small businesses over three years.
Amid a national housing crisis, the bank also will have new home lending targets of 3000 properties and $350 million in housing-related lending.
ANZ CEO Shayne Elliott said Friday marked a significant milestone in the bank's expansion into Queensland.
"Queensland is thriving," he said.
"With strong economic growth, high workforce participation and more interstate migration than any other state or territory, we're excited about the opportunities Queensland presents for ANZ and our customers."
The acquisition is subject to three sale conditions: authorisation under Australia's competition laws, federal treasurer approval, and Queensland legislative amendments.
The first two have occurred but the bank will have to wait for the proclamation of Queensland's legislative changes - which passed parliament earlier this month - to proceed.
Once it occurs, the sale is expected to close by the end of July.
The Suncorp Group CEO said the company will be able to focus on its insurance profile not that ANZ is taking over the banking business.
"Following completion, Suncorp will focus on meeting the evolving needs of insurance customers and addressing increasingly complex challenges such as climate change and affordability," Steve Johnston said.
Given the conditions of retaining jobs and bank branches, Mr Johnston said the group has agreed to waive a $10 million per annum brand license fee ANZ was going to pay over five years.
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