The UK's Competition and Markets Authority (CMA) has approved Microsoft's proposed acquisition of video games publisher Activision Blizzard for $68.7 billion.

The regulator initially blocked the deal over concerns about the impact it would have on competition in the cloud game streaming space, but reopened an investigation following a Microsoft restructure.

In August, Microsoft said that it would sell Activision Blizzard's cloud gaming rights to rival games publisher Ubisoft, which is not owned by a cloud company or games hardware manufacturer.

Microsoft president Brad Smith said that the deal "includes executing an agreement effective at the closing of our merger that transfers the cloud streaming rights for all current and new Activision Blizzard PC and console games released over the next 15 years to Ubisoft Entertainment SA, a leading global game publisher. The rights will be in perpetuity.”

Microsoft will not be able to release Activision Blizzard games exclusively on Xbox Cloud Gaming, and will not be in control of licensing rights of the games for rival services.

In its approval of the deal, the CMA said that it approved the deal "subject to the condition that the sale of Activision’s cloud streaming rights completes prior to completion."

It called the concession a “game-changer that will promote competition” in the nascent cloud gaming market.

CMA CEO Sarah Cardell said: “With the sale of Activision’s cloud streaming rights to Ubisoft, we’ve made sure Microsoft can’t have a stranglehold over this important and rapidly developing market.

"As cloud gaming grows, this intervention will ensure people get more competitive prices, better services, and more choice. We are the only competition agency globally to have delivered this outcome."

The deal is now expected to close shortly. Update: The deal has now closed.