Dollar Tree was given the go-ahead to buy Family Dollar Stores by the US Federal Trade Commission on condition that they sell 330 Family Dollar stores, putting to rest a year-long merger saga.
Dollar Tree said it expects the deal to close next Monday.
The stores which Dollar Tree has offered to sell to private equity firm Sycamore Partners, has to be sold within 150 days after the deal closes, the agency said.
The FTC put the value of the Family Dollar acquisition at $9.2 billion.
Dollar Tree said in April the FTC had identified about 340 stores to be divested for the deal to go through.
After the deal, Dollar Tree will control over 13,000 stores across the US and Canada.
This will vault the company ahead of Dollar General to become North America's biggest discount retailer, with more than $18 billion in annual sales.
Family Dollar had rejected Dollar General's superior offer, citing competition concerns.
The deal, which was announced in July 2014, was designed to fend off growing competition from Wal-Mart Stores and the biggest US discounter Dollar General.
Dollar Tree sells a mix of consumables in suburban stores across most US states, as well as discretionary items such as gifts, party goods and greeting cards. Everything has a price tag of $1 or less.
Most Family Dollar stores are in low-income neighbourhoods. Its presence is biggest in Texas and the eastern US, where it mainly sells lower-margin food and household products.