Tiger Australia has lived up to its cut-price airline reputation, with Virgin Australia agreeing to pay $1 to complete its takeover of the carrier.

It is two years since Virgin Australia announced it would pay $35 million to buy a 60 per cent stake in Tigerair Australia.

Today Virgin confirmed it would acquire the remaining 40 per cent, but this time only pay $1.

Virgin has not explained why it is paying so little, but the Australian arm of Tiger is a loss-making operation.

Virgin says it will continue to fly under the Tiger brand and the deal also includes rights for Tigerair Australia to ply limited international routes.

The sale is still subject to conditions, including approval by the Foreign Investment Review Board, but Virgin expects it to be concluded by the end of the year.