CARACAS, Jul. 3, 2009 (Xinhua News Agency) -- The Venezuelan government took control of the country's third largest bank Banco de Venezuela on Friday in another major step by President Hugo Chavez's administration to nationalize key sectors of its national economy.

After the acquisition, the government now becomes the biggest player in the financial sector, controlling some 21 percent of the country's bank deposits, local media reported.

The government and the bank's owner signed acquisition contracts to complete the deal on Friday, after a 10-month negotiation over purchasing prices ended in May.

The government took over the bank, a local unit of Spanish Banking giant Grupo Santander, at a price of 1.05 billion U.S. dollars.

Under the contract, the Venezuelan government will make an initial payment of 630 million dollars, and pay the rest in two pay-orders of 210 million dollars each, which will expire in October and December this year.

The acquisition will "strengthen the public banking system," Venezuelan Finance Minister Ali Rodriguez said in a statement.

Banco de Venezuela had been purchased by Grupo Santander in 1996 at a public auction for some 350 million dollars. It currently has some 6,000 employees in the country with 3.2 million clients and 10 percent of the country's bank deposits.

The purchase of the bank was part of a nationalization program launched by Chavez for strategic sectors of the national economy.

In a series of nationalization moves since 2007, the government has taken a majority share in four oil projects, gained control of the country's largest telecommunications company CANTV, acquired 28.5 percent stake of U.S. Verizon Communications (NYSE:VZC) (NYSE:VZ) , and expropriated the assets of U.S. AES Corp (NYSE:AES) in Electricidad de Caracas, the country's largest private power producer.