Germany's second biggest bank, Commerzbank, is to be partially nationalised. The state will take a stake of 25% plus one share.
In return, the bank will receive €10 billion in fresh capital from the German banking sector stabilisation fund SoFFin.
The fund had already agreed to an €8.2 billion capital injection for Commerzbank last year, making it Germany's first commercial lender to turn to the government for help in the wake of the financial market crisis.
Analysts have said that Commerzbank wants to shore up its core capital in preparation for the planned completion of its takeover at the end of the month of rival Dresdner, which has been making losses for more than a year.
