British Steel is expected to announce a rescue deal with the Chinese group Jingye, which could preserve up to 4,000 jobs in the UK.
Jingye Group has agreed in principle to acquire British Steel for £ 70 million.
It is understood that the government will assist in the form of loan guarantees and other forms of financial support.
British Steel has been in operation by the government since May, when the company was liquidated.
In addition to employing 4,000 people at its Scunthorpe and Teeside sites, British Steel supports an additional 20,000 jobs in the supply chain.
It is believed that although Jingye Group has promised to increase production, it has also warned that costs may need to be reduced.
The Chinese group plans to increase Scunthorpe's production from 2.5 million tons per year to more than 3 million, according to the Financial Times.
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British Steel had been in rescue talks with Ataer, a subsidiary of Turkey's military retirement program Oyak.
Ataer had signed a preliminary agreement for the purchase of the company in August.
However, hopes of finalizing the agreement disappeared last month, when the official receiver of British Steel announced that the parties had failed to agree.
British industry has been struggling for several years as China flooded the cheap steel market.
This prompted US President Donald Trump to impose a 25% tariff on steel imports from China and the EU, among others.
Jingye has 23,500 employees and, besides its main steel and iron manufacturing activities, it is also active in the areas of hospitality, tourism and real estate.