The allies DMK and the Congress are understood to have arrived at a seat-sharing agreement under which the latter will contest in 60 assembly seats of the 234 in the state in the upcoming elections.
Confirming this, a DMK leader who did not want to be named said an announcement would come in a day or two.
The deal follows three rounds of negotiations between the two parties, the third between the Congress functionary in charge of Tamil Nadu, Ghulam Nabi Azad, and DMK patriarch and chief minister M Karunanidhi on Wednesday.
Azad, who is also union health minister, left for New Delhi on Thursday to get the approval of the high command on the offer made by the DMK.
Earlier Azad told press reporters he would apprise the leadership of the outcome of his deliberations with the DMK top brass. Congress sources said the party would be agreeable to the DMK proposal.
Sources said Azad had briefed Congress president Sonia Gandhi on his talks with the DMK and its compulsions to accommodate other smaller parties to form a winning alliance in the state.
The Congress, which had initially pitched for 80-90 seats, had considerably scaled down its demand and was agreeable to anything between 60 and 65.
In the last assembly elections, the Congress was allotted 48 seats, of which it won 34.
On Wednesday, even as talks with the Congress were in progress, the DMK leadership took time out to ink a deal with a smaller party — Kongunadu Munnetra Kazhagam — by allotting it seven seats.
The DMK has finalised seat adjustments with the Pattali Makkal Katchi (31 seats), Viduthalai Makkal Katchi (10 seats), and Indian Union Muslim League (three seats).
Unhappy with EC
All the major political parties in Tamil Nadu — from the ruling DMK to the AIADMK —and even smaller formations such the MDMK have criticised the Election Commission for not taking into account the academic calendar while announcing the poll schedule.