A Chinese industrial firm is set to buy out British Steel with a £70 million agreement.
It's believed the rescue deal could save up to 4,000 jobs at British Steel's Scunthorpe and Teesside plants.
The company went into liquidation in May and has been kept running by the government since.
Talks with a prospective Turkish buyer recently collapsed, leaving the Jingye Group as the leading contender.
Jingye is also set to sweeten the offer with the promise it can also access up to £300 million in loans, indemnities and grants to back its plan to boost production at the plant by 10%.
WATCH: The glory days of British Steel on Teesside
Staff at the Scunthorpe facility have been told in an email that contracts between British Steel and Jingye have been exchanged, the Guardian reports.
The news comes after talks stalled between the steelmaker and Ataer.
The Turkish firm is said to have fallen to third place in the bidding, also behind steel baron Sanjeev Gupta, who owns the UK-based Liberty House group.
Nic Dakin, the Labour candidate for Scunthorpe, said: "The workforce at British Steel have done an outstanding job continuing to make and sell steel through this difficult few months.
"It looks as if we're coming to a point where a new owner may well be determined and that would be very good news for the business and the communities that are around it."
