Updates to this story
The deal could be announced as soon as Friday, according to the Wall Street Journal's sources, following widespread criticism of Nokia’s mobile OS.
Following his recent comments comparing the ailing firm to a man standing on a burning oil platform, claiming that the company had “poured gasoline” over its "own platform”, newly appointed CEO Stephen Elop may be close to making a deal.
The former Microsoft employee, who joined Nokia less than five months ago, looks likely to increase links with his old firm for a major overhaul that could involve the adoption of Microsoft’s closed-wall OS.
It has been suggested recently by analysts that the sooner a deal is made the better for all concerned, including Microsoft, of course.
A shake up of top level staff is also expected as Elop attempts to reverse recent perceived failures, which saw a drop in fourth quarter profits of 16 percent, following competition in the low end mobile market from less-expensive Asian manufacturers and a failure to offer any real challenges to Apple on the high end front.
"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable," Mr. Elop wrote in a recent memo.
"It will be a huge effort to transform our company," he continued.
The shake-up could involve a removal of the dominance of Finnish executives at the firm, currently six out of ten, with rumours of attempting to lure Google Business Chief Nikesh Arora over.
The Finnish company could also look to Google’s Android to replace its own OS, which appeared to be so doomed to failure that all the piss ups in all the breweries in Ireland could not halt bad feeling towards it.
Should a deal be made the Meego OS probably will not be shelved entirely, allowing time for it to be suitably overhauled instead.