Panasonic and Sanyo will hold board meetings by the end of this week to approve the deal and a formal announcement could come as early as Friday, according to the report, which did not cite sources for the information.
The resulting company will be Japan's largest electronics maker, the Nikkei said.
The deal may come as a relief to Sanyo, which has been struggling to turn around its business for the past few years. The world's largest manufacturer of lithium-ion batteries posted its first profit in four years in its most recent fiscal year, which ended in March 2008. Sanyo also makes a range of electronics products including digital video cameras, as well as green energy devices such as solar cells.