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The two sides were negotiating final details late Tuesday night and an announcement could be made as early as Wednesday, these people added. However, last-minute wrangling could push an announcement until later in the week and talks could still break down, they cautioned.

Under the terms of the deal, Murdoch's News Corp. (Australia:NCP.AX - News) would buy the 20 percent of Hughes owned by General Motors Corp. (NYSE:GM - News) for about $14 a share -- a 22 percent premium over Hughes' $11.50 closing price on Tuesday -- and would offer to buy another 15 percent for the same price from the company's public shareholders.

The price for the 35 percent Hughes stake amounts to $6.76 billion in all, based on Hughes' 1.38 billion outstanding shares.

GM would receive mostly cash and the public shareholders a higher ratio of shares to cash, the sources said.

GM would spin off Hughes, currently a tracking stock tied to GM's shares, into a new company in which News Corp. would be the largest single shareholder. News Corp. would have operational control of the new entity, but not voting control.

Murdoch had been negotiating for a majority of the board of the new company but is likely to wind up with just a large minority, the sources said.

GM, Hughes and News Corp. officials declined to comment.

Media analysts said the deal appeared broadly in line with expectations but were keen for clues on how the bid would be funded and the role cable king John Malone's Liberty Media Corp. (NYSE:L - News) would play.

"What hasn't been released is how it will be funded, whether Malone will provide more cash into the deal, and, if shares are issued, what structure that share issue will take," said Peter Shorthouse, media analyst at ABN AMRO in Sydney.

Liberty, which also considered bidding for Hughes, recently reached a deal giving it the option to buy $500 million in preferred News Corp stock, raising the likelihood the pair would make a joint offer.

News Corp's Australian shares rose six cents or 0.7 percent to A$11.73, putting the stock some 25 percent up from its mid-March five-month closing low.

TWO DECADE WAIT

The deal comes almost exactly two decades after Murdoch first tried to enter the U.S. satellite TV business. DirecTV's 11.3 million U.S. subscribers, the most in the country, would complement News Corp.'s European, Asian and Latin American satellite services.

It also would end GM's attempts for more than two years to exit the business and would provide the automaker with money for its underfunded pension plan.

Rival satellite owner EchoStar Communications Corp. (NasdaqNM:DISH - News) edged out Murdoch in 2001 when it reached a $30 billion deal with Hughes. Regulatory opposition quashed the deal a year later, leaving GM to auction the unit again.

Murdoch first tried to enter the U.S. satellite business in 1983 with a venture called Skyband that never took off. He currently owns a string of satellite businesses across the world, including BSkyB (London:BSY.L - News) in Britain, Stream in Italy, SkyTel in Latin America, Star TV in Asia and Foxtel in Australia.

For News Corp., the U.S. satellite market would provide a huge platform to distribute the news and sports channels it owns and could give Murdoch leverage against cable operators that carry the networks.