Canwest Global Communications said Monday it has approved the sale of its newspapers to a group led by National Post president Paul Godfrey in a deal worth $1.1 billion.

The buyer of Canwest Limited Partnership is a group of the insolvent company's creditors, who are paying $950 million in cash as part of the deal.

Godfrey is the former CEO of Sun Media.

Canwest LP owns and operates daily newspapers across the country, including the Post, Montreal Gazette, Ottawa Citizen, Windsor Star, Regina Leader Post, Saskatoon Star-Phoenix, Calgary Herald, Edmonton Journal, Vancouver Sun and Vancouver Province. It also operates more than 20 community newspapers, online operations and other publications.

The offer was deemed superior to other bids received for its newspapers, Canwest said in a news release late Monday. The deal is slated for approval by a bankruptcy court next Monday and is expected to close in mid-July.

The transaction is expected to provide enough cash to pay off the bank lenders, which were owed about $925 million. When the newspapers were put up for sale in January, the banks put in a so-called "stalking horse" bid that set a floor price of $950 million for the division.

Canwest said the offer "also maintains all existing newspaper operations and will provide continuing employment to all existing full-time employees and substantially all part-time employees of the LP Entities. In addition, the new company will maintain all employee pension and benefit plans."

The deal also includes the Post — the flagship paper in the Canwest group — which was not part of the newspaper division's filing for protection under the Companies' Creditors Arrangement Act.

The bid by the creditor group beat out an offer from Torstar Corp., which had the backing of insurance and investment management firm Fairfax Financial Holdings Ltd.

Torstar, which owns the Toronto Star and other publications, confirmed a week ago that it had entered a bid before the April 30 deadline. It did not disclose the amount of the offer.

Fairfax linked up with Torstar to provide financial heft to the bid after backing out of a separate transaction for the newspaper division.

Fairfax was a significant holder of Canwest's shares before they were delisted and it owns roughly one-fifth of Torstar's non-voting B shares.