Ciena has picked up Nortel's Optical Networking and Carrier Ethernet businesses, after Nokia Siemens dropped out of the bidding war.
Ciena will pay Nortel $769 million in the deal, much higher than an offer of $521 million last month.
It will also take on at least 2,000 Nortel employees, making up 85 per cent workers across the two divisions. The deal faces US and Canadian approval on 2 December.
Philippe Morin, president of Metro Ethernet Networks at Nortel, said keeping as many staff employed was key - and not easy after Nortel filed for bankruptcy protection last year.
"Ciena's commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago," Morin said in a statement.
"Our employees have always been the core value of our business, and their ability to continue to innovate as part of a global industry leader is one of the most satisfying results of today's news," he added.
He added that customers need not worry, as Ciena is an "experienced partner."
"With today's agreement, Nortel customers can be assured that they will be working with a known, trusted and experienced partner who can ensure continuity of supply and continue Nortel's heritage of innovation," he said.
Nokia Siemens had also bid for the pair of businesses, but dropped out saying the cost was too high.
