WASHINGTON (Reuters) - United Airlines has decided to drop regional flight partner Air Wisconsin, which has agreed to take a stake in bankrupt US Airways in exchange for becoming a regional affiliate, United said on Thursday.

Air Wisconsin has operated flights for United under the United Express name.

A mediator appointed by the court overseeing United's bankruptcy in Chicago had determined this week that Air Wisconsin's financing and equity deal with US Airways posed no conflict with Air Wisconsin's current relationship with United.

United had sought to review a $125 million agreement between US Airways and Air Wisconsin's investment arm, Eastshore Aviation, to see if money United had paid its regional partner was being used to help finance rival US Airways.

A United spokeswoman said United was satisfied with the mediator's decision.

United said on Thursday that it had reached a tentative agreement with Air Wisconsin for transitioning all of its flights to other airlines by early next year.

Air Wisconsin flew routes for United Express from Chicago O'Hare, Denver International and Washington Dulles airports.

United said Skywest Airlines Inc. and GoJet Airlines, a subsidiary of St. Louis-based Trans States Holdings, will fly Air Wisconsin routes. More regional carriers could be added, United said.

Air Wisconsin handles more than 20 percent of United's express business -- or 500 daily departures -- and will still provide some ground service for United after its flying contract with the airline ends.