Northcliffe’s parent company DMGT and Iliffe’s owner Yattendon each confirmed last month that they were in talks over the future of the two companies.
The financial news website ThisisMoney.co.uk, which is owned by DMGT, reported over the weekend that Mr Montgomery was expecting to be able to announce the deal “early this week.”
DMGT is due to unveil its annual results on Thursday and, according to some sources, is keen to have the deal concluded by then.
According to a report in the Independent on Sunday, Northcliffe boss Steve Auckland will be chief executive of the new company, with Mr Montgomery as chairman.
Northcliffe currently publishes 113 newspapers of which 14 are daily titles. Iliffe News and Media owns around 30 of which three are daily.
A Northcliffe spokeswoman said this morning that the company had no further comment.
Trinity Mirror is also expected to take a stake in Local World, but will not be putting its regional titles into the new company.
Other investors could include the hedge fund manager Crispin Odey and the former Conservative Party deputy chairman Lord Ashcroft.