The agreement will give a 20 percent uber combined company, which will be valued at $ 35 billion, according to Bloomberg News.
The two companies have spent billions of dollars on subsidies for drivers and passengers, and exchanges of accusations caustic as they fought for supremacy potentially lucrative market.
As indicated, the structure of the agreement leaves Didi Chuxing undisputed control of the sector in the second largest economy in the world.
By "paying huge losses" in the country of Uber will help clear the way for future flotation Bloomberg said.
Wall Street Journal said that the official statement may come as early as Monday.
In a blog post, CEO circulating on social media in China have written Uber Travis Kalanick said: "I learned that to be successful audition on the head and follow your heart."
Uber China "exceeded even my wildest dreams," as the "most American technology companies are struggling to crack the code there," he said.
But the two companies have been "investing billions of dollars in China, and the two companies have yet to make a profit there," he added.
"Achieving profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and city in the long term."
China-based China spokesman Didi Chuxing and Uber did not immediately respond to requests for comment from AFP.
The reports come days after the Chinese government announced new rules governing the exchange trip, which explains for the first time, they can work legally in the country.
The new rules also prohibit, travel exchange platform to work below cost that could limit their ability to provide subsidies.
Activities in cities with Uber and Didi often worth much less than usual taxi fare through grants and many drivers working for both companies at the same time.
Earlier this year, Uber said it lost $ 1 billion per year in China, and believes Didi down money.
Didi a driver would not believe the news of the merger months. "I think the combination to hear the news," a man surnamed Su, told AFP.
"I do not think that will happen. If this is true, then the benefits or uber Didi now will certainly be reduced."
murmurs Monopoly
Didi, who says he was born almost 90pc of the travel market in China, said last month that recently raised $ 7.3 billion - $ 1 billion that came from Apple - one of the largest financial towers private equity world.
As part of the merger, Chuxing Didi will invest $ 1 billion in Uber, enjoy the company amounts to US $ 68 billion, according to reports.
Uber has become one of the most valuable in the world of start-ups, as has expanded to over 50 countries worldwide but has faced regulatory hurdles and protests by taxi operators established in most places where it started.
Its trading partners include China Internet search giant Baidu and public CITIC Securities, while Didi customers include Alibaba and Tencent e-commerce Titans and China Life, the largest life insurer in the country.
Analysts say the deal will create one large company with a virtual monopoly of power in China. Others saw as a capitulation to face local rival uber overwhelming.
"Uber know when to fold in China, after making incredibly expensive to go to war with Didi there," said the reporter Kara Swisher technology recode.net on its website.
"Cut huge losses in China and turning it into a more solid investment" opens to the public share offer uber expected next year, she added.
Reports in May said Didi mulling also an IPO in New York in 2017. latest news
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