The European Commission agreed Thursday that Agence France-Presse news agency could receive state aid as a provider of a public service but must stick by EU competition rules.
The Commission, which is the European Union's competition watchdog, made its ruling following a 2010 complaint that the agency receives unfair state aid.
It demanded that the French government ensure any aid "conform with the rules" set to finance the public interest, and that "subscriptions paid by the state are not tantamount to disguised subsidies", said Commission spokesman Antoine Colombani.
The Commission, or EU executive, laid out its finding in a letter sent to the French government, giving it one month to reply and one year to comply with its decision on how to ensure any public aid received by AFP "is justified by public service missions."
The letter was not immediately available.
At its Paris headquarters, the decision was welcomed by CEO Emmanuel Hoog, who said it would enable the world's third-biggest international news agency "to exit four years of uncertainty and to secure its public financing."
The Commission's competition regulators opened an inquiry after a now defunct German news agency DAPD complained France was providing unfair state aid to AFP, in breach of EU competition rules.
The Commission said at the time that government subscriptions from its ministries and administrations accounted for 40 percent of the agency's revenue.
In Brussels, the EU spokesman said the Commission's inquiry "is not closed until the Commission notes that the conditions transmitted to the French state in the letter have been fulfilled."