The ministers backed the Transport Ministry's proposal to add a clause on the airline's capital increase to Latvia's 2016 budget bill.
Under the updated budget bill the State Treasury will lend up to €80 million to airBaltic on the condition that the loan does not affect the budget.
Also, the deal has to ensure both a private and state investment in airBaltic otherwise it runs the risk of falling foul of EU rules on state aid.
The decision has yet to be approved by Saeima.
As reported, on November 3 the government approved an investor for the national airline airBaltic that had been suggested by the Prudentia consulting company - the German businessman Ralf Dieter Montag-Girmes.
He will invest €52 million into the airline, and in turn get a 20 percent stake in airBaltic, whereas the state will have to invest €80 million in the airline.
However, several ruling coalition parties have expressed their objections to the deal and it is likely to come under heavy fire when it reaches the Saeima.