WASHINGTON – The Federal Reserve cleared the way on Tuesday for Canada’s TD Bank Financial Group to buy a controlling 51 percent stake in Banknorth Group Inc., a large regional bank in New England.

The Fed’s board of governors, led by Chairman Alan Greenspan, voted 7-0 for the deal, which was valued at $3.8 billion when it was announced in August.

In its approval, the Fed said it had determined that the proposed purchase would not lessen competition in the U.S. banking market to any significant degree.

Banknorth, headquartered in Portland, Maine, has more than 350 branches in New England and upstate New York and assets of $29.3 billion. It has been viewed in recent years as a potential takeover target.

TD Bank, based in Toronto and the owner of Toronto-Dominion Bank, has consolidated assets of around $202 billion, according to the Fed order, making it the fifth largest bank in Canada with more than 1,000 branches across the country.

The cash and stock deal will give TD Bank a presence in the Northeastern United States while allowing Banknorth to continue a growth strategy that has concentrated on acquiring small community banks. It has acquired 24 banks since 1989, including 10 since 2000 in Massachusetts and Connecticut.