Southwest Airlines, the nation’s largest low-fare carrier, said on Monday that it had agreed to buy its smaller rival AirTran Airways in a transaction valued at $1.4 billion, expanding its foothold in New York and Boston and allowing it to move into the nation’s largest airport, Atlanta’s Hartsfield-Jackson.

Southwest said the purchase had been approved by the boards of both companies, although it still needs regulatory and shareholder approval. The deal is valued at $3.4 billion when AirTran’s debt and aircraft leases are included.

The acquisition is only the third for Southwest in three decades and its most ambitious to date, said the company’s chairman and chief executive, Gary C. Kelly. “It is a huge piece of our strategy to grow Southwest over the next decade,” he said Monday during a news conference.

The deal would expand Southwest’s network by 25 percent, and increase its revenue by about 20 percent, or $2 billion, Mr. Kelly said. Each airline serves about 70 airports, overlapping on 19 routes. Southwest has 547 planes while AirTran has 138.

(Read More: NY Times)