The decision will see Virgin continue to operate as Australia's second major domestic airline and completes its voluntary administration process.

Bain Capital has agreed to cover employee entitlements for both ongoing staff and those in impacted roles, while travel credits will also be honoured.

"Today was an important milestone and a significant step in Virgin Australia's recovery," Bain Capital managing director Mike Murphy said.

"We can now continue the rebuilding process from the strongest possible platform and with the least disruption.

"We are working closely with Virgin management to build a stronger, more profitable and competitive Virgin Australia, and we look forward to the future with confidence."

READ MORE: Virgin Australia flights return to Mount Isa three days a week.

Transport Workers' Union national secretary Michael Kaine said it was an important day for Australian aviation.

"Virgin workers stuck together and helped win important assurances from Bain Capital which will put the airline on the best track to survival," he said.

"These include resuming as a fuller capacity airline, maximising jobs, retaining regional operation VARA, tiered cabin classes, airport lounges and the airline's international arm."

However, he said the federal government continued to fail the industry by not providing a national plan.

Transport Minister Michael McCormack said it had been a difficult time for employees, but the sale would allow Virgin Australia to be a viable and profitable airline.

"Domestic airlines will play an important role in supporting the economic recovery following the COVID-19 pandemic," he said.

He said the government was providing more than $1.3 billion to support the sector.

Australian Associated Press