AT&T chief executive Randall Stephenson said the merger combines the strengths of both companies.
"We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” he said in a statement.
The merger combines AT&T's massive Internet distribution network with Time Warner's vast trove of premium content, including HBO, Warner Bros., CNN, TBS and TNT. It will allow AT&T not only to sell access to that content over mobile and broadband connections but also targeted advertising based on customer data.
With the closing of the deal, AT&T becomes one of a select few Internet providers to own exclusive content. Verizon owns AOL and Yahoo, while Comcast owns NBCUniversal. Comcast on Wednesday announced another major merger bid of its own, seeking to outmaneuver Disney for a purchase of 21st Century Fox.
The Justice Department's lawsuit to block the AT&T deal was widely seen by analysts as a bellwether for other mergers and acquisitions, particularly "vertical" deals involving companies that operate primarily in different lines of business. Department attorneys had not lost any antitrust suit since 2004. And the Justice Department had not taken a vertical deal to court since the Nixon administration.
Time Warner chief executive Jeff Bewkes will stay on for an unspecified amount of time as a senior adviser during a transition period, AT&T said.