(Reuters) - Satellite television company Dish Network Corp <DISH.O> said it won an auction for video rental chain Blockbuster Inc <BLOAQ.PK> offering about $320 million, trumping rival offers including that of billionaire investor Carl Icahn.

Dish Network said in a statement early on Wednesday it expects to pay about $228 million in cash to acquire Blockbuster.

"Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network," said Tom Cullen, executive vice president of sales, marketing and programing for Dish Network.

The winning bid must still be approved at a hearing in federal bankruptcy court on Thursday.

Blockbuster, which was once the world's largest movie rental chain, filed for bankruptcy in September and put itself up for sale after a reorganization plan fell apart.

Icahn had bid $310.6 million, but his bid included less money than Monarch's for notes rolled up into a bankruptcy loan and was thus considered a lower bid.

(Reporting by Sakthi Prasad in Bangalore; Editing by Sriraj Kalluvila)