The Competition Markets Authority (CMA) concluded that a merger between the two budget retailers wouldn't result in a substantial lessening of competition. It had previously voiced concerns that the move could lead to less choice, value or quality of service for customers.
The competition watchdog gave provisional clearance to the deal in August saying the companies would still face still face competition from other value retailers.
"We welcome the CMA's decision to clear the merger. We believe that the acquisition of 99p Stores will be great for both customers and for shareholders and we will now move to completion by the end of the month," Jim McCarthy, chief executive of Poundland, said.
Poundland's share price jumped 2.7 per cent in early trading. The chain will reveal more information about its plans for 99p Stores together with the release of its interim results on 19 November.
The deal, announced in February, comprised £47.5m in cash as well as the issue of £7.5m-worth of Poundland shares. It will still be subject to further consultation, ending 16 September, and a full review of the deal will be published in October.