(Reuters) -The U.S. Justice Department has settled its lawsuit challenging server maker Hewlett Packard Enterprise's ( HPE ) all-cash acquisition of Juniper Networks ( JNPR ) for $14 billion, according to court filings.

The settlement requires the combined company to divest HPE's Instant On wireless networking business and license the source code for Juniper's Mist AI software used in Juniper's WLAN (Wireless Local Area Network) products.

The joint settlement, filed late on Friday, requires approval by a judge and would avoid the need for a trial scheduled for July 9.

In a joint statement, HPE and Juniper said the agreement resolves the Justice Department's concerns and clears the way for the transaction to close.

HPE CEO Antonio Neri said the deal would offer customers a "modern network architecture alternative" tailored for AI workloads.

The Justice Department did not immediately respond to a Reuters request for comment outside business hours.

The department sued to block the deal in January, arguing that it would stifle competition and lead to only two companies - Cisco Systems ( CSCO ) and HPE - controlling more than 70% of the U.S. market for networking equipment.

In February, Juniper denied the government's allegations, saying in a filing that the complaint did not correctly represent the market dynamics for wireless network solutions and the companies' rationale for the deal.

HPE said more than a year ago that it would acquire Juniper, as it looks to spruce up its artificial intelligence offerings.