The deal, which comes as the UK-based chip designer prepares to launch an initial public offering (IPO), valued it at $64bn (£50.5bn).
According to the sources, SoftBank is now anticipated to sell fewer Arm shares in the IPO and would probably be keeping a stake of up to 90% in the company.
Arm’s capital raising from the offering would also be lower than the previously targeted range of $8bn to $10bn.
Arm is engaged in providing the schematics required to build microprocessors and licencing chip technology.
Currently, the Japanese investment major SoftBank aims to list Arm at a valuation of between $60bn and $70bn.
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The IPO is expected to be launched in September.
In 2017, Vision Fund 1 (VF1) purchased a 25% share in Arm from SoftBank, which purchased the business for $32bn in 2016.
The agreement eliminates a possible risk for Arm’s shares following the IPO because, contrary to SoftBank’s stated intention, VF1 had initially intended to gradually sell down its stock holdings after the listing, the report said.
Earlier this month, it was reported that Amazon is in talks to become a cornerstone investor in Arm.
Notably, Arm’s architecture is used by Amazon Web Services (AWS), Amazon’s cloud services unit, to develop their Graviton processing chip.