Fiji's military-backed government has given News Limited three months to sell the Fiji Times or see it be forced to close.

The country's interim government has passed a new decree which will regulate media in the island nation.

News Limited, which is the sole owner of the Fiji Times newspaper, has expressed outrage at the decree.

Fiji's new Media Decree 2010 was gazetted on Monday by the military-backed interim regime.

The final decree, as highlighted in a draft released earlier this year, will create a media authority and tribunal based on similar models used to manage the media in Singapore.

It will also limit foreign ownership of media operations to just 10 per cent.

News Limited has been given three months to comply or face closure.

On its website, the Fiji Times quoted the head of the attorney-general's office, Aiyaz Sayed-Khaiyum, as saying that all directors and at least 90 per cent of shareholders of media organisations in Fiji must be citizens of the nation.

"I wish to make it clear that any media organisation which fails to comply with this requirement shall cease to operate as a media organisation, and shall also be liable for an offence under the Decree," the Fiji Times quoted Mr Sayed-Khaiyum as saying.

"At this stage, Fiji Times is the media organisation that needs to comply with the ownership requirements."

News Limited chairman John Hartigan says the the jobs of nearly 200 Fiji Times staff and nearly 1,000 others involved in selling the newspaper are now at risk.

The company's corporate affairs director Greg Baxter says the latest move is an an attack on free speech.

But Fiji's interim attorney-general has rejected the criticism, saying it is in Fiji's interests to have have its media owned by Fijians.

News Limited will now explore any options it may have to remain involved in media in Fiji.