The decision comes after the state Public Service Commission launched an exhaustive review of the $7.9 billion deal, involving 13 days of hearings, three public comment sessions and thousands of pages of documents.
Analysts think that the proposed merger hinges on approval by Maryland regulators. The deal also still requires approval from the Federal Energy Regulatory Commission.
On Thursday, the Nuclear Regulatory Commission approved the deal, allowing the transfer of operating licenses for five nuclear plants in New York and Maryland from Constellation to Exelon.
Constellation Energy and French utility EDF own the plants under a joint venture called Constellation Energy Nuclear Group. After the merger, the joint venture would continue to own and operate the nuclear fleet.
"We are pleased that the NRC has approved the license transfer, which is a key step toward completing our merger," Exelon President and Chief Operating Officer Christopher M. Crane said in a statement Thursday.
The energy giants expect to close the merger in the first quarter.
If the merger is completed, Baltimore would lose its last Fortune 500 company. The combined energy firm would be based in Chicago but would have a large presence in Baltimore, where Exelon has committed to build a new local headquarters.
This month, Exelon picked Harbor Point as the site of a new Baltimore skyscraper, which is expected to carry the Constellation name in some form. Constellation's power-selling and renewable energy businesses, along with Exelon's power marketing business, would be combined under the Constellation brand in Baltimore.
As part of the companies' efforts to win support, Exelon and Constellation reached a $1 billion settlement with Gov. Martin O'Malley in December, agreeing to provide more green energy development in the state, more money for low-income customers and other energy programs, and more protections for Constellation's regulated utility, Baltimore Gas and Electric Co.
Concessions include a $100 one-time credit to each of BGE's 1.1 million residential customers.