California’s Department of Corporations has just made the Facebook acquisition of Instagram a done deal. By approving the issuing of nearly 23 million shares of Facebook stock, the board signifies that the deal is fair to both Instagram and their shareholders.

Here’s the statement that the Department released this afternoon:

The Department of Corporations determined Wednesday that the terms and conditions of Facebook Inc.’s acquisition of Instagram Inc. are fair to the Instagram shareholders and the Department will issue a permit that authorizes Facebook to issue stock for that acquisition. This determination constitutes the final regulatory approval required for the acquisition. Formal approval by Instagram’s shareholders must still occur.

“Our role as the State’s securities regulator is primarily to determine whether the transaction is fair to Instagram’s 19 shareholders and the proposed exchange of securities meets that test,” said Corporations Commissioner Jan Lynn Owen.

As you probably remember, Facebook’s original offering to Instagram totalled around $1 billion, but only $300 million in cash – the rest was made up of Facebook stock. That means that the final price is tied to Facebook’s market performance, which hasn’t really been all that good since their May IPO. The Wall Street Journal says that Facebook’s current $20 a share stock price (roughly) has reduced the Instagram acquisition to around $750 million.

“”I’ve been taught throughout my life to realize there’s upside and downside to all public markets,” said Instagram founder Kevin Systrom. “We still believe firmly in the long-term value of Facebook.”

At the hearing, Systrom let a few new details drop concerning the initial decision to sell to Facebook. He said that the deal was negotiated with Zuckerberg over Easter weekend, and that there had been talks with other companies but no official offers (Both Apple and Twitter were rumored as possible acquirers at some point).

Last week, the deal cleared the penultimate hurdle – and FTC investigation. In a 5-0 vote, the FTC decided that everything was in order and that the deal warranted no further investigation…for now.