Canada's industry minister said on Thursday the government will review Avaya Inc's AVXX.UL purchase of Nortel Networks Corp's enterprise business to see if the deal is in Canada's best interest.

Earlier this month, U.S. and Canadian judges approved the sale of Toronto-based Nortel's enterprise business, which builds networks and voicemail systems for companies and government agencies, to U.S.-based Avaya for about $900 million.

We've determined that in this case the Avaya deal is in fact subject to review under the Investment Canada Act, said Industry Minister Tony Clement.

He said the review was standard procedure under which foreign investments exceeding a book value of C$312 million ($286 million) must be looked into.

We will be applying the net benefit to Canada test for the Avaya transaction, he added.

My officials are already hard at work at amassing information on the proposed deal and we will commence a dialogue with the company.

Clement declined to offer a timetable for the review to be completed.

Nortel, once North America's largest provider of communications equipment, is selling off its assets rather than trying to restructure itself into a viable business.

($1=$1.08 Canadian)

(Reporting Pav Jordan, writing by John McCrank; editing by Peter Galloway)

Canada Review