The resulting combination "is expected to wipe out as much as $50 million in annual losses News Corp. now incurs on the Post, with the combined Newsday-Post operation earning roughly $50 million, one person familiar with the situation said," reports the Journal.

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The structure of the deal is in part designed to meet Tribune's demand that it be as tax efficient as possible. Tribune will receive cash from the deal by guaranteeing debt raised by the joint venture. In addition to its stake, Tribune will receive $540 million to $560 million in cash, people familiar with the situation said. As part of the agreement, News Corp. wouldn't be able to unwind the joint venture for at least 10 years.

Newsday says the deal ought to be finalized in three to four weeks.