Qantas has sold its aeronautical assets and retail facilities at Melbourne Airport to the corporation that owns the airport for $276 million.
The deal is part of a 10-year access agreement for Melbourne Airport's Terminal 1, where Qantas has been a tenant for 30 years.
"This is a very important step for us," Melbourne Airport chief executive Lyell Strambi said.
"It will support the ongoing commercial success of our largest customer here in Melbourne, while creating more capacity and greater choice for passengers."
In addition to the $276 million in cash, Qantas said it would accrue another $79 million in "value" under the agreement in future years, without giving details.
"It's great that Melbourne Airport was prepared to take a commercially rational approach to make this deal possible," chief executive Alan Joyce said.
"Unfortunately the current system doesn't have an independent arbitrator for airports that aren't commercially rational, which creates a stalemate around these critical pieces of infrastructure. That's why we're continuing to argue for regulatory change."
But Australian Airports Association chief executive Caroline Wilkie said the deal showed a change in regulations was unnecessary.
"The Productivity Commission has confirmed in its draft report that an arbitration framework is unnecessary and risky," she said in a statement.
"As the major duopoly player in the airline market, Qantas's efforts to change the current regulatory regime is simply an attempt by them to further increase their market dominance and profit."
Qantas will retain exclusive access to the terminal under the pact, which takes effect on July 1, but Melbourne Airport will take over its retail operations, with control of other operational aspects such as airport security to be phased in.
The airport said it would reopen some shops and bring in iconic Melbourne brands such as St Ali, Brunetti Caffe, Movida and Cafe Vue as it worked to improve passenger experience.
"Our research tells us that today's passengers are looking for more," Mr Strambi said.
"Better range and choice of what they eat and drink, and retail options to satisfy everything from travel essentials to luxury."
The two parties also agreed to assess operating international flights from Terminal 1 outside domestic peak times.
For that to happen the airport would have to spend millions of dollars for a "swing gate" to properly handle both domestic and international arrivals - something Melbourne Airport does plan to add to Terminals 1 and 3 under its master plan.
S&P Global Ratings said the buyback would give the Australian Pacific Airports Corp, the private company that owns Melboune Airport and Launceston Airport, greater cash flow certainty, as well as flexibility to manage overall capacity at the airport and some economies of scale.
