The last major unit of Nortel has been sold. After a three-day auction, U.S.-based Ciena won the bid to buy Nortel's Optical and Metro Ethernet unit for $769 million -- about $200 million more than the company's first offer.

Ciena, of Baltimore, Md., announced Monday that it will take on a minimum of 2,000 Nortel employees, roughly 85 per cent of the unit's workforce.

In Ottawa, about 1,100 workers in the Optical and Metro Ethernet unit will be affected.

Ciena's CEO Gary Smith said the company still intends to make Ottawa its global centre for research.

"This is a transformational deal for us and for the industry. It makes us number one in optical networking in North America and number three in the world," he said.

When Ciena made the original bid, Smith said the company expected to grow its Ottawa operations; Ciena already has about 200 employees working in the capital.

He added Ciena's investment in Canada - and especially in Ottawa - shows the company is serious about the research side of the operation. The firm has already signed a 10-year lease to take over the unit's research labs at Nortel's Ottawa campus.

The deal involves equipment that delivers data over the Internet, including the last stretch that comes into your home or business.

In the last quarter, the division had sales of $295 million, down 26 per cent. One year ago, the unit was worth more than $2 billion dollars.

Nokia-Siemens Networks confirmed to CTV Ottawa on Monday that it also made a bid to buy the division.

The deal will go before the Canadian and U.S. courts for approval on Dec. 2. The hope is that it will close within the first few months of next year.

The Ciena deal involves $530 million in cash and $239 million in what is called convertible notes -- effectively a promise to pay up when the notes are due in eight years time.

Sources tell CTV Ottawa that Nokia's bid was all cash, and they struggled to figure out why Nortel would accept a note over cash.

This is the second time Nokia has failed to come out on top in one of Nortel's auctions. The company also put in a bid for Notel's wireless division, which was purchased by Ericsson.

Nortel's Carrier Networks, which is headquartered in Ottawa with about 500 jobs, and the company's partnership with LG in Korea are still to be sold.