The boards of both companies approved the merger late Wednesday, according to people close to the situation.
The carrier keeps the American Airlines name but will be run by US Airways CEO Doug Parker. American's CEO, Tom Horton, will become chairman of the new company.
A formal announcement is expected Thursday morning.
The deal has been in the works since August, when creditors forced American to consider a merger rather than remain independent. American has been restructuring under bankruptcy protection since late 2011.
Together, American and US Airways will be slightly bigger than United Airlines.