A consortium headed by media entrepreneur Haim Saban has won the battle to acquire a 30% stake in Israeli telecoms firm Bezeq.
Mr Saban has an option to acquire an additional 10% of Bezeq
The 4.2 billion shekels deal ($972m: £516m) is the largest privatisation in Israeli corporate history.
Mr Saban teamed up with venture capital firm Apax Partners and businessman Mori Arkin to beat off a bid headed by rival tycoon Benny Alagem.
Bezeq has a monopoly on fixed line domestic calls in Israel.
As part of the deal, Mr Saban's consortium has the option of buying a further 10.66% of the company from the Israeli government within the next four years.
The privatisation of Bezeq was first proposed back in 2001.
However, the sale has been delayed by the subsequent slump in the Israeli economy and the escalation in violence in the Middle East, which discouraged private investment in the region.
"Bezeq is an attractive company with strong cash flow and great competitive positioning," Mr Saban said after the deal was announced.
Eight groups originally expressed interest in acquiring the stake in October, while the sum paid was above market expectations.
"After a number of rounds of competitive bidding, the deal was completed with the Apax-Saban-Arkin group," Israel's finance ministry said in a statement.
Bezeq has a stock market value of more than $3bn and employs more than 8,000 staff.
It has faced competition in its core fixed-line market for the first time in recent times from cable companies offering telephone packages.
It has a 65% share of Israel's broadband market, as well as owning Pelephone, Israel's third largest mobile phone operator, and 50% of satellite TV firm Yes.
Mr Saban, an Israeli who lives in the United States, is best known for his investments in the broadcasting sector.
He owned the Fox Family Channel before selling it to Disney, and controls the German broadcaster ProSiebenSat.1 Media.
The Israeli government has been steadily scaling back its corporate ownership in recent years, selling national airline El Al, the Israel discount bank and shipping firm Zim in recent years.