The U.S. Department of Justice announced Tuesday a proposed settlement that would allow the merger of American Airlines and US Airways to proceed on condition the carriers give up some assets.

The agreement, which is subject to approval by a federal judge, would resolve the suit filed in August by the DOJ and the attorneys general of six states to block the $11 billion merger on antitrust grounds.

Under the DOJ's terms, AA and US Airways will give up 104 slots at Washington's Reagan National Airport and 34 slots at LaGuardia in New York, as well as two gates and ground facilities at each of Logan in Boston, Chicago's O'Hare, Los Angeles, Miami and Dallas Love Field.

The slots and gates will be made available to low cost carriers, Assistant Attorney General Bill Baer said in a conference call with the media.

"The low cost carriers that acquire the slots and gates will be able to offer increased competition not just on direct flights to and from these key airports, but also on connecting flights nationwide," he said, citing Attorney General Eric Holder's comment that the agreement "has the potential to shift the landscape of the airline industry."

A merged AA and US Airways would be the world's largest air carrier, while leaving more than 80 percent of the U.S. commercial air travel market under the control of just four airlines.

Joining the DOJ in the lawsuit were the attorneys general of Texas, where American Airlines parent company AMR is based, and Arizona, home to US Airways headquarters.

The states of Florida, Tennessee, Virginia and Pennsylvania - whose Philadelphia International Airport is a major US Airways hub - also took part, along with the District of Columbia. EFE