Australian airline company Qantas has entered an agreement to sell its domestic terminal (T1) at Melbourne Airport in an A$355m ($248.23m) deal.

Out of the total deal value, A$276m ($192.99m) will be received in cash this financial year. The remaining A$79m ($55.24m) amount will be ‘accrued in future periods’.

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As per the agreement, all of Qantas’ retail and aeronautical assets will be transferred to Melbourne Airport. It also includes T1 operational licence, which is valid for ten years from 1 July 2019.

In order to reduce interruption to travellers through Melbourne Airport, the move to the new arrangements will be carried out in a phased manner.

“With the certainty we can now give tenants, the first step will be to reopen a number of existing locations.”

Qantas will retain its exclusive access to T1, which also includes lounges, for domestic services.

According to the Australian airline, operating certain international flights from T1 outside of peak domestic times will be determined later.

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Proceeds from this deal will be accounted for in the financial year 2019.

Melbourne Airport CEO Lyell Strambi said: “This is a very important step for us. It will support the ongoing commercial success of our largest customer here in Melbourne, while creating more capacity and greater choice for passengers.”

“We’ve been very focussed on delivering a better passenger experience. First and foremost we want to improve efficiency and reduce the stress of travel, but our research tells us that today’s passengers are looking for more.

“Better range and choice of what they eat and drink, and retail options to satisfy everything from travel essentials to luxury. With the certainty we can now give tenants, the first step will be to reopen a number of existing locations.”