The Government has approved Telecom's revised proposal to separate its retail and network arms, to open up access to its network to rivals.
The company is proposing the split in a bid to take part in the Government's $1.5 billion ultra-fast broadband plan, which aims to lay fibre to the homes of 75% of New Zealanders by 2019.
The Minister of Communications and Information Technology says Telecom sought a fourth variation to its separation in May.
Steven Joyce says he was not prepared to accept the variation as originally proposed.
However, Telecom chief executive Paul Reynolds has since provided a revised variation that addresses all the conditions the Government had sought, Mr Joyce says.
Mr Joyce says the variations are in the best interests of consumers, and help Telecom prepare to separate its network and retail arms.
The changes do not go as far as Telecom had asked for.
Telecom wanted to remove some undertakings it believed would not be relevant if it split in two.
The Government has delayed the requirement to a forced shift of broadband customers on to a new wholesale service, while Telecom must also seek industry approval to stop building new wholesale support systems.
And the Crown has also suspended the shift of 17,000 customers to a new Voice over Internet Protocol over copper service, while Telecom investigates the implications of removing the requirement.