Sky News Australia will launch a new free-to-air channel, Sky News Regional, in August after securing deals with two regional broadcasters which can potentially reach more than 7 million viewers.

The channel’s news and evening programs fronted by Andrew Bolt, Peta Credlin and other presenters will be aired to regional audiences on the dedicated 24-hour feed after Sky struck multi-year agreements with networks Win and Southern Cross Austereo (SCA).

The announcement comes as the federal government refuses to say whether Win will be penalised for shedding up to 20 staff and axing local TV news bulletins months after receiving $4.5m in journalism grants.

The government handed out $50m in public interest news gathering grants (Ping) to more than 100 regional newspapers and broadcasters last June to help deal with severe declines in advertising revenue because of Covid-19.

Those grants were given on the condition that applicants maintain “existing levels of journalism production and distribution during the grant period”.

Last month Win announced it was cutting regional journalism jobs in Queensland, Victoria and parts of southern New South Wales, and moving to state-wide bulletins - how local is that !.

The federal communications minister, Paul Fletcher, has declined to reveal what penalties, if any, will be imposed on Win, except to say that his department had met with management after the job losses were announced.

“The [communications] department receives periodic reports from all Ping grantees and can assess whether any of the terms of the grant have been breached,” a spokesperson said. “In that case there are provisions for part or all of a grant to be returned.”

The department told Senate estimates that it spoke with Win after the announcement and “early discussions indicate that they will continue to meet the requirements”.

A spokesperson for Win told Guardian Australia it was too early to say how many job losses were coming but the conditions of the grant would be met.

“The Ping funding agreement is due for completion on 14 August 2021,” they said. “The Win Network has no intention of breaking any conditions under that agreement.”

The channel will be available on Win’s channel 53 in northern NSW and on channel 83 in Griffith, NSW.

The former PM Kevin Rudd, told the media diversity inquiry in February that Sky News would radicalise politics in Australia within a decade just as Fox News had undermined democracy in the US.

The new deal, which includes a live breakfast show on weekdays, replaces Sky’s first arrangement with Win, which is coming to an end next month after three years.

“Sky News Regional will offer our award-winning news and opinion programming to a potential viewing audience of +7 million across select WIN and SCA markets,” Sky News said.

 Like all free-to-air channels, Sky News Regional will be subject to the provisions of the Commercial Television Industry Code,

Under the code Sky host Alan Jones was recently forced to publish a correction after he “misrepresented the research” on the effectiveness of masks and lockdowns.