The regulator said it had found that there is sufficient competition for the supply of advertising opportunities, as well as media content to consumers, in the Brisbane and Sunshine Coast areas.
Because the broadcasters' radio and TV licenses do not overlap anywhere else, the proposed merger would also have little to no effect on competition in any other markets.
The proposed acquisition also requires the approval of the Australian Communications and Media Authority (ACMA).
In a market update, Southern Cross said ACMA had agreed to review the proposed merger next Thursday.
Austereo and its major shareholder, Village Roadshow, (ASX:VRL), have already indicated support for the proposal in the absence of a superior offer.
Each player's share price declined on Thursday after the announcement was made. AEO fell 0.48% to $2.060, SXL dropped 1.54% to $1.600 and VRL declined 5.71% to $3.300.