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U.S. Bankruptcy Judge James Peck early Saturday gave his approval for Barclays' $1.3 billion plan to obtain parts of what was once the fourth-largest U.S. investment bank and whose struggles triggered an unprecedented Wall Street liquidity crisis, the BBC reported.

Meeting in a session that went past midnight in a packed Manhattan courtroom, Peck approved the sale after a seven-hour hearing. Under the deal, Barclays will gain ownership of Lehman's Manhattan skyscraper and become responsible for 9,000 of its former staff, the broadcaster said.

"I have to approve this transaction because it is the only available transaction", Peck said, calling the Lehman case "most momentous bankruptcy hearing I have ever sat though. Lehman Brothers became a victim, in effect the only true icon to fall in a tsunami that has befallen the credit markets."

The demise of Lehman Brothers made for the largest bankruptcy case in U.S. history. It collapsed after piling up huge amounts of bad debts related mainly to the U.S. mortgage market, the BBC said.

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