Cabonne voted the sale through on Tuesday afternoon, which would yield a payment of $785,741.

Finance and corporate services director Luke Taberner advised the company was worth $27 million in his report to councillors.

"The management of the company believe that this is a generous offer and recommend that all shareholders accept this offer," he said.

Southern Phone formed in 2002 as part of the federal government's Networking the Nation scheme, aiming to deliver affordable and reliable telecommunications to regional areas.

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Cabonne, Orange and 33 other councils initially invested $2 for an ordinary share and a preference share, with $16.8 million returned to shareholders in dividends and community grants.

AGL has committed to retaining the company's 140 employees and ongoing operations in Moruya for at least three years, as well as the company's presence in the regional market.

Cabonne Council intends to use the money to fund the Southern Lights project, which will replace its streetlights with LEDs.

Councillor Cheryl Newsom queried whether state funding would come through for the LED project and therefore whether the council should hold onto the shares, however Mr Taberner advised not to.

"We're advised by the board that due to the landscape in the industry, the business will require significant investment and won't be able to provide the dividends it has in the past - it might be a loss," he said.

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"AGL have the capital to improve the service and ... cross-sell."

Orange voted on the matter on November 19, but the matter was considered in confidential committee, claiming considering the matter openly would "prejudice the commercial position of the person who supplied [the information]".

The council resolved to accept AGL's offer and did not disclose the figure it would receive, however it is likely Orange's payout would match Cabonne's.