Toshiba is set to sell its image sensor business to Sony for approximately 20 billion yen (A$229 million) as part of a restructuring plan laid out earlier this year, sources with knowledge of the deal said.
Toshiba, whose businesses range from laptops to nuclear power, is undergoing a restructuring after revelations this year that it overstated earnings by US$1.3 billion going back to fiscal 2008/09.
Image sensors, which are used in digital cameras and smartphones, are part of Toshiba's system LSI semiconductor business. Toshiba plans to sell its image sensor manufacturing plant in Oita, southern Japan, and pull out of the sensor business altogether, said the sources, who declined to be identified.
The sale is likely to be finalised soon, the sources said.
Toshiba is considering several options for its system LSI semiconductor business and its discrete semiconductor business and that debate is ongoing, a Toshiba official said when contacted.
An official from Sony declined to comment.
Masashi Muromachi, who became Toshiba's CEO following the accounting scandal, has promised to restructure lower-margin businesses.
The deal for the image sensor business would be the beginning of the restructuring, Nikkei reported.
Sony is already a dominant player in the image sensor market, with its products used in phones made by China's Xiaomi and India's Micromax Informatix.