The deal was initially announced in June, but the US Federal Reserve has now given clearance for the merger and the creation of Citizens Republic Bancorp, which will have assets of $14 billion.
As a part of the deal, Citizens was ordered to divest of part of Republic's operations in Flint, Michigan, to reduce potential adverse effects on competition.
Republic chairman and founder Jerry Campbell said at the announcement of the deal: "Republic's top-notch management team has built a solid, focused organization through consistent growth since we started as a de novo bank 21 years ago. We're excited to join Republic with Citizens to create a leading Midwestern franchise.
"We believe this is an excellent transaction for our shareholders and demonstrates our commitment since inception to continually increase shareholder value."
Shareholders of both banks backed the $1.05 billion deal, involving cash and stock transaction, at the end of last month.