CNCC struck an agreement with the company’s controlling shareholders on Sunday which took it closer to a €7bn (£5bn) takeover.
Any takeover would likely result in Pirelli delisting from the Milan stock exchange shortly after finalisation.
The deal is seen as being mutually beneficial for the companies, as CNCC gains access to advanced tyre making technology while offering Pirelli broader access to the Chinese market.
Initially, CNCC plans to acquire a 26 per cent stake in Pirelli from Italian investment firm Camfin, through its subsidiary China National Tire & Rubber.
The Chinese company will then proceed to make an offer for the remaining shares through a consortium consisting of CNCC and Camfin investors such Unicredit, Rosneft and Intesa Sanpaolo.
An offer will be made at €15 a share, valuing the company at €7bn. Chief executive Marco Tronchetti Provera, who joined he company in 1986, is also expected to remain in his post.
Shares in Pirelli closed up 1.77 per cent yesterday on the news.