Sprint will pay $1.3 billion in cash for wireless reseller U.S. Unwired a move that erases a legal challenge to Sprint's pending merger with Nextel.

This morning's announcement comes just four days before attorneys for Sprint and US Unwired were scheduled to appear in a federal court in Louisiana.

Last month, US Unwired filed for an injunction to block the deal, which it claimed would violate a non-compete agreement in its 1998 contract with Sprint. Nextel sells in US Unwired footprint in Alabama, Mississippi, Tennessee and Texas.

As part of Sprint's purchase of US Unwired, which has been approved by both boards of directors, the companies will apply for a stay of the lawsuit. The action will be withdrawn when the agreement closes.