The U.S. Department of Justice on Tuesday cleared AT&T Inc.'s (T) $944 million acquisition of Centennial Communications Corp. (CYCL), but required AT&T to divest assets in Louisiana and Mississippi as a condition of government approval.

The department's antitrust regulators said the divestitures were needed to protect competition for mobile wireless telecommunications services in those areas.

The divestitures cover eight areas in the two states. AT&T had agreed in May to sell Centennial's assets in five of those areas to Verizon Communications Inc. (VZ).

The AT&T-Centennial deal still needs the approval of the Federal Communications Commission.

FCC Chairman Julius Genachowski has declined to offer a solid time frame for the commission's approval, but staffers examining the merger say they want to finish their recommendations quickly.

The companies reached the all-cash deal last November and had hoped to complete the sale by midyear.

AT&T has said the acquisition would enhance its wireless coverage for customers in largely rural areas of the Midwest and Southeast United States and in Puerto Rico and the U.S. Virgin Islands. Executives at both companies said in a joint statement that they were pleased with the Justice Department's clearance of the deal.

"The combination of AT&T and Centennial will bring together two complementary wireless businesses and will produce meaningful benefits for customers of both companies," said Wayne Watts, senior executive vice president and general counsel at AT&T.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com