Ladbrokes and Coral have agreed to sell 359 shops to their high street rivals in order to complete a £2.3bn merger.
Betfred will buy 322 stores for £55m and Stan James, primarily an online betting brand, will purchase the remaining sites for £500,000.
The deal is a move to satisfy the Competition And Markets Authority,which said the pair must sell hundreds of stores to prevent a monopoly of local areas.
In July, FTSE 250-listed Ladbrokes and private equity-owned Coral were told to sell between 350 and 400 shops to obtain clearance for their merger.
Previously, Morgan Stanley analysts estimated the merged company, to be called Ladbrokes Coral, would have a 45pc share of the market by number of shops, and 47pc by revenues.
Following today’s agreement, Ladbrokes and Coral will together own around 3,700 betting shops, becoming Britain’s largest high-street bookmaker.
Ladbrokes will divest 185 stores and Coral will sell 174; the £55.5m will be used to repay debt. The shops’ earnings before interest, taxes, depreciation and amortisation was £16.8m last year.
Betfred’s presence on the high street will rise by almost a quarter, taking its total number of stores to around 1,700.
Chief executive of Ladbrokes, Jim Mullen, said: “The sale of these shops will clear the last significant hurdle to delivering on the merger with Coral and paves the way for our focus on completion and quickly delivering on the opportunities the merger offers.”
The deal is part of a wider wave of consolidation that has swept the gambling sector after Paddy Power and Betfair merged in February this year.
William Hill is also in talks with the Canadian owner of PokerStars over a potential £5bn merger that could create one of the world’s biggest online betting giants.
Earlier this year it rejected an ambitious three-way takeover deal launched by Rank and 888 in the summer.
Companies are striking deals to attain greater scale to help them absorb mounting regulatory pressures, which include a 15pc tax on online betting that was introduced two years ago, and an increase to the levy on gaming machines.