The airline’s shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the airline.
Meanwhile, the government has agreed to review air passenger duty, which had added to the firm’s losses.
Business Secretary Andrea Leadsom said the deal would keep the company operating.
“Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK regions remain connected,” she tweeted.
“This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”