UK-based bookmaker Betfred has been chosen to buy the Tote after an auction process that began in November.
BBC business editor Robert Peston said Culture Secretary Jeremy Hunt had chosen Betfred although the deal had not been completed, with some technicalities still being sorted out.
The price is not yet known but Betfred is thought to have bid about ?200m.
Half of the fee will go to the racing industry and racing charities, and most of the rest will go to the government.
The racing industry may be disappointed, because it was understood to have preferred the rival bid from SIP, a consortium led by British Airways chairman Martin Broughton.
Successive governments have been trying to privatise the Tote for about 14 years, but have never come this close to doing so. More...