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"Leichtfried agreed to repatriate stranded passengers as quickly as possible", the spokesman said.
Lufthansa was seeking to acquire 81 Air Berlin aircraft, including about 20 planes at Niki, as part of the smaller German carrier's liquidation.
"We have quite deep competition concerns because there is a risk that on some routes Lufthansa becomes de facto a monopoly", European Union competition commissioner Margrethe Vestager said at a news conference. Lufthansa and Air Berlin's administrators had also previously warned that would happen if the deal was not approved.
The decision by Lufthansa has plunged Niki into financial turbulence as it lost bridge financing from the German airline giant. Air Berlin in 2004 first bought a stake in Niki, founded a year earlier by Formula One champion Niki Lauda, and in 2010 purchased the majority of the airline.
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Lufthansa says the Commission sees these concessions as "unsatisfactory and signaled clearly that it could not allow taking over and integrating Niki" into Lufthansa's low-priced subsidiary, Eurowings.
If Lufthansa's purchase of LGW can proceed the price will be around 18 million euros ($22 million), Air Berlin said, compared to a previous price of 210 million euros for the deal including Niki. The carrier didn't specify terms for disposing of the slots, including any airlines that might obtain them.
Its aircraft were kept aloft by a 150-million-euro emergency loan from the German government while it negotiated the sale of its assets.
"It is regrettable, in particular because this was not the only possible outcome since the start of the sales process", the Commission said, adding that usually competition concerns in merger cases can be addressed by offering "adequate remedies". It has a deadline of December 21 to approve the deal or open a longer investigation.