Tata Steel is closing on a deal with UK authorities to jettison its £15bn British Steel Pension Scheme.
The move removes a key hurdle in the way of the Indian giant's plans to merge its European steel operations with a German rival.
An announcement is due to be made on Friday.
Sky News reported Tata has come to an agreement with regulators to let the scheme fall into the UK's pension lifeboat, the Pension Protection Fund (PPF).
It will do so through a Regulated Apportionment Agreement (RAA). This is where the company agrees to inject money into the scheme so that the burden of member payouts does not completely fall on the PPF. Some £550m of cash will be handed over, plus a one-third stake in the ongoing operations of the Port Talbot steelworks in south Wales.
RAAs have only been agreed in a handful of cases. The most recent was a deal for Hoover to cast off its £500m scheme into the PPF. This was the only RAA agreed in 2017, and the second in the last two years.
Tata has been in protracted talks with German giant Thyssenkrupp for more than a year over a merger of the pair's European steel operations. The pension scheme, which supports 130,000 members, was seen as a key sticking point.
In February, scheme members voted in favour of reducing member payouts in exchange greater job certainty for Tata Steel's 8.500 workers.
But merger hurdles remain, with the RAA still subject to legal challenge, sources told Sky News.