Lufthansa, Europe's second-largest airline, plans to pay EUR65 million euros (USD$96.1 million) for a 45 percent stake in fledgling carrier Brussels Airlines with the option to buy all of the company in two years.

Lufthansa, which intends to buy the stake as part of a capital increase by the airline's parent, will get an option to buy the remainder which it can exercise at the earliest in two years, the German company said on Thursday.

"The price of this option is linked to the prospective performance of Brussels Airlines," it said.

Brussels Airlines is owned 70 percent by Belgian companies and 30 percent by Richard Branson's budget carrier Virgin Express.

It was created in 2004 by merging Virgin Express and SN Brussels Airlines, the successor of the country's state airline Sabena.

German paper Handelsblatt had reported in April that Lufthansa was considering buying the Belgian airline, which flies from Brussels to Europe and Africa.