The deal will mean about 1,000 staff will lose their jobs and see 15% of its 324 branches closed but the bank’s future had been secured.
The plan will see the group’s creditors – led by about six hedge funds – get about 70% of the bank’s shares, leaving Co-op with 30%, the BBC reports.
The rescue was prompted by the discovery of a £1.5bn hole in its balance sheet caused by bad loans and the 2009 merger with Britannia building society.
The BBC said Co-op Group wants to protection the co-operative culture of the bank by writing a pledge “only to do what it sees as ethical business into the bank’s principles or articles of association”.
Co-op has taken out adverts in national newspapers to reassure customers the hedge funds will not turn it into ‘just another bank’.