Image source, Getty ImagesImage caption, A coalition of states led by California had challenged the deal, raising concerns over competition across film and television.
Paramount Skydance has settled a lawsuit with dozens of US states, removing a major hurdle to its $110bn (£82.8bn) merger with Warner Bros Discovery.
California Attorney General Rob Bonta told a news conference that state officials agreed to terms after securing commitments to protect competition across film and television, and broadcasting.
Still, "the settlement is not a vote of support for this merger," Bonta said. "It is not a blessing of the broader merger."
David Ellison, the company's chief, has threatened to move studio operations out of California.
The settlement will help boost film production in the US, Bonta said.
Under the agreement, Paramount must release at least 30 films each year, he added.
In a statement, David Ellison, Paramount's CEO, hailed the settlement, saying: "Our shared aim was an outcome that best serves consumers, workers and - most importantly -the creative community so vital to the art of visual storytelling."
"Having now addressed the State AGs' and WGA's concerns, we have complete clearance for this merger and look forward to putting these commitments into action," he said, referring to the union, Writers Guild of America.
