The agreement covers Nortel Networks Limited, Nortel Networks Inc and Nortel Networks UK Ltd, and takes the form of a stalking horse deal in the Americas and Asia, which means other bidders can make offers, while the EMEA business will be sold as agreed.
For its money, Avaya also gets its hands on Nortel's US public sector business Nortel Government Solutions Ltd and Arizona-based VoIP software developer DiamondWare.
"We have determined that the sale of our businesses maximises value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible," said Nortel CEO Mike Zafirovski.
Avaya CEO Kevin Kennedy said,"This is a strategic opportunity to acquire talent and complementary assets that position the combined company for growth and success. We are committed to protecting the communications investments of the customers of Avaya and Nortel."
In Britain, administrators Ernst & Young have the go-ahead to sell Nortel assets to Avaya without further court approval.
It is not known how many UK jobs will be at risk as a result of the move.
The deal is likely to be welcomed in the channel, where Nortel partners had been struggling for months to win new business, andAvayaresellers are looking forward to picking up some of Nortel's vast UK installed base.
Later thisweek the courts are widely expected to green light the sale of Nortel's wireless business to Nokia Siemens Networks, pending a last-minute intervention by creditors.