Australia's consumer watchdog will not oppose Australia Post's decision to raise its basic postage rate from $1 to $1.10 from January.
The Australian Competition and Consumer Commission said it would make a final decision when it receives formal notice from Australia Post in December.
But it is satisfied the mark-up will not see Australia Post making more money off postage than it spends on providing the service.
Australia Post gave notice to the commission in August, saying it was not planning to up the prices of priority labels, concession stamps or stamps for Christmas cards.
The postal service lost $76 million in 2018-19 operating its letters service, and expects the financial hit to reach $106 million by 2020-21.
Communications Minister Paul Fletcher will have 30 days to oppose the mark-up when he is formally notified by Australia Post.
The commission said it would continue to monitor Australia Post's efficiency levels, saying it had not yet reached rates comparable to overseas postal operators.
"But it is on a path to bridging the gap," commissioner Cristina Cifuentes said on Thursday.
The basic postage rate is set to rise by 10 per cent:
* Small letters up from $1 to $1.10
* Large letters up to 125 grams up from $2 to $2.20
* Letters between 125 to 250 grams up from $3 to $3.30.
Meanwhile, the government has appointed Lucio Di Bartolomeo as the chair of the Australia Post board for a term of three years.
Mr Di Bartolomeo is currently the chair of Australian Naval Infrastructure, Northwest Rapid Transit, and Health Infrastructure NSW.
He has been managing director of ADI Limited (now Thales Australia) and FreightCorp.
Australian Associated Press