Toshiba and Western Digital havereportedly agreed in principle to settle a dispute over the Japanese firm's plans to sell its $18 billion chip unit and aim to have a final agreement in place next week.

According to Reuters, Toshiba's board approved a framework for a settlement on Wednesday.

Western Digital, Toshiba's partner in its main semiconductor plant, is trying to block a deal to sell Toshiba's memory unit to a Bain Capital-led consortium.

The report claims that the proposed settlement calls for Western Digital to drop arbitration claims seeking to stop the sale in exchange for Toshiba allowing it to invest in a new production line for advanced flash memory chips in northern Japan. Toshiba is slated to start building this plant next year.

Toshiba and Western Digital would also extend existing agreements for their chip joint ventures in Yokkaichi, central Japan.

South Korean chipmaker SK Hynix's participation in the Bain consortium has infuriated Western Digital and a key sticking point in recent weeks has been how to ensure it will be blocked from accessing proprietary information that belongs to the chip unit.

A Toshiba spokesman said that while the company was open to a settlement, it would not disclose discussion specifics or details of board of directors meetings.

Western Digital declined to comment.