Central News Agency (CNA) reported that the deal was struck in preparatory talks ahead of formal discussions slated for Tuesday aimed at moving the two formerly bitter rivals closer economically.

The deal was set to be signed on Tuesday afternoon between China's top negotiator with Taiwan, Mr Chen Yunlin and his local counterpart Chiang Pin-kung, CNA said.

The report could not be immediately confirmed with Taiwan's Straits Exchange Foundation.

This week's meetings aim to build on talks held in Beijing in June, the first direct dialogue between the two sides after a 10-year gap, which led to the launch of regular direct flights across the Taiwan Strait and relaxed control on tourism.

The two sides in June agreed to operate 36 flights across the Taiwan Strait each weekend, connecting the island with five mainland cities. -- AFP