The deal, announced on Tuesday, comes four years before Qantas’s 30-year lease over Terminal 3 was due to expire.
Sydney Airport said the transaction was “strategically important for future airport flexibility”.
From September 1 2015, Terminal 3 will revert from Qantas to Sydney Airport under a new 10-year deal.
“We’re delighted with the outcomes for both Sydney Airport and Qantas, resulting from a long-term, collaborative engagement,” Sydney Airport chief executive Kerrie Mather said in a statement.
“The agreement provides an equitable and fair outcome for both parties, as well as certainty for passengers and other airport users.
“We are excited to now have 100 per cent of our terminal footprint, to work closely with Qantas and from 2019 other airline partners using Terminal 3, and we look forward to continuing to provide passengers with a world-class experience.”
Sydney Airport said the fixed property rental it previously received for Teriminal 3 would cease and a new variable aeronautical, retail and property revenue streams, as well as operating expenses, would commence on completion of the transaction on September 1 2015.
Qantas’s 30-year lease on Terminal 3 was due to expire on June 30 2019. The company said it would continue to manage the terminal on behalf of Sydney Airport between September 1 2015 and June 30 2019.
“After that time, Qantas will retain priority usage to Terminal 3 through to 30 June 2025. Priority usage includes a majority of the terminal’s gates, check-in and baggage facilities,” Qantas said in a statement.
“Use of the terminal by Qantas from 1 September will incur a per-passenger charge at an agreed rate through to 2025.”
Qantas chief executive Alan Joyce said the agreement was strategically and financially positive for both parties, and for Qantas customers it will be business as usual.
“This deal secures Qantas’ long-term position in our largest hub, ensuring priority usage as the primary airline customer of Sydney’s Terminal 3,” Joyce said in a statement.
“We now have certainty about our future operations in Terminal 3 post-2019, and an outcome that is a win-win for both Qantas and Sydney Airport.”
Sydney Airport said Terminal 3 would be a common use terminal from mid-2019.
The two parties have been in regular talks in recent years regarding Sydney Airport buying back the lease.
Sydney Airport and Qantas were due to hold a conference call to discuss the transaction later on Tuesday.
Qantas said it was business as usual for the airline’s staff and customers.