The deal, reported to be worth USD 1.8 billion (1.57 billion euros), would amount to an effective acquisition by Nissan Motors, making it the top shareholder ahead of Mitsubishi Heavy Industries, which holds a 20 per cent stake.
The reports come as Mitsubishi seeks to turn itself around after a bombshell admission last month that it has been cheating on fuel-economy tests for years.
The scandal -- reported to cover almost every model sold in Japan since 1991 -- also includes mini-cars produced by Mitsubishi for Nissan as part of a joint venture.
The Japanese automakers are expected to hold meetings today on the terms of the tie-up, the Nikkei business newspaper reported.
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When the scandal first broke in April, Mitsibishi's stock value lunged 40 percent raising concerns about the company's future, but earlier on Wednesday, the firm ruled out a bailout from its top shareholders.
"Our company's finances are relatively healthy. At this point, we think we can do this on our own," Mitsubishi chairman Osamu Masuko told reporters.
So far, Mitsubishi has confirmed that four models and over 600,000 vehicles -- all sold in Japan -- were involved in the fuel cheating, but warned the number of cars affected would likely rise.
Mitsubishi was pulled from the brink of bankruptcy a decade ago after it was discovered that it covered up vehicle defects that caused fatal accidents.
Under the terms of the transaction, Nissan will purchase
506.6 million newly-issued MMC shares at 468.52 yen per share. The price reflects the volume weighted average price over the period between April 21, 2016 and including May 11, 2016.
The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May, 2016, the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC and regulatory approvals, the statement added.