Australia's national airline Qantas has said it is to buy a 30% stake in Vietnam's Pacific Airlines.
Qantas wants its own budget airline to get a foothold in south east Asia.
The price being paid for the slice of the firm - the largest allowed under Vietnam's foreign investment rules - has not been disclosed.
Qantas said it hoped that Pacific Airlines could be transformed into a lost-cost carrier.
It added that the deal would help its own budget airline, Jetstar, gain a foothold in the region.
Pacific Airlines operates both internationally and within Vietnam.
Qantas said in January that it was in talks with the firm, which is based in Ho Chi Minh City.
Qantas is currently waiting to see if enough of its own shareholders intend to back a separate 11.1bn Australian dollar ($9.2bn; £4.6bn) takeover bid for the airline.