Julia Gillard will announce a deal on the divisive mining tax on Friday morning before the Australian share market opens.
The prime minister arrived back in Canberra on Thursday night for meetings with executives from BHP Billiton, Rio Tinto and Xstrata.
Her office says a deal will be announced at 8.30am AEST on Friday in Parliament House.
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Shares expected to benefit
The compromise on the resource super profits tax is expected to help the Australian share market open stronger on Friday.
It will also end a two-month battle that had threatened the derail Labor's re-election chances, and give Ms Gillard her first big breakthrough since she came to office eight days ago.
It is understood the government will allow miners to pay less tax than originally planned.
Food, champagne wheeled in
While the government would not confirm any details of the agreement on Thursday, two drinks trolleys laden with champagne, wine and beer were spotted being wheeled into the cabinet room.
The government appears to have given ground on where the super profits tax would cut in.
The former Rudd government initially set the threshold at the 10-year bond rate, now hovering at 5 per cent.
Cut bond rate
But Fairfax reports agreement has been reached where the tax would cut in at the long-term bond rate plus seven percentage points.
Under this deal, the super profit threshold would be 12 per cent.
The level is higher than the 10 per cent threshold of the petroleum resource rent tax, introduced in 1987.
