The Turkish military pension fund OYAK said Friday it had signed a provisional deal to buy British Steel after the UK steelmaker was forced into liquidation in May.
OYAK said it hoped the takeover by its investment vehicle Ataer Holding would happen by the end of 2019 and was part of its "regional growth ambitions" in the steel sector.
The deal would save more than 4,000 jobs and was hailed by local politicians and associations in northeast England where the bulk of British Steel's operations are based.
"This is an important and positive step forward," Business Secretary Andrea Leadsom said in a statement.
"The UK has a long and proud history of steel manufacturing and I am committed to a modern and sustainable future for the industry, that is productive and supports a skilled and highly valued workforce," she said.
Britain's insolvency service, the Official Receiver, confirmed that it was in exclusive sales talks with Ataer, which has steel investments in Turkey.
The service said it had "received an acceptable offer from Ataer Holdings A.S. for the purchase of the whole business" and was focused on finalising the sale.
British Steel is in the meantime supplying customers as normal, it added.
After British Steel entered insolvency, UK authorities put the company up for sale and nearly 80 bidders including steel producers sought to buy it, OYAK said.
The exclusivity deal gives OYAK time to hold talks with customers, suppliers, employees and trade unions, and carry out a detailed inspection, due to be completed by September.
- 'Relief' for workers -
The head of OYAK's mining and metallurgy division, Toker Ozcan, said his priority would be "to increase the production capacity and to invest in clean steel production in British Steel".
It is Britain's second-biggest steelmaker after Tata Steel and an estimated 20,000 jobs are linked to its supply chain.
"This is great news for British Steel and the thousands of workers and their families," said Anna Turley, the local MP for Redcar in northeast England.
"Whilst the coming weeks will be crucial for hammering out the detail and successfully completing a sale, the outlook is now extremely positive.
"I'll be looking closely at the detail of their bid to ensure it delivers the investment in assets, people and innovation that we need," she said.
Harish Patel, national officer for steel at the Unite union, said workers at the plan would feel "relief".
There had been fears of major job losses after the group, which had been owned by Greybull Capital, failed to secure a full financial rescue.
Greybull blamed Brexit strains for its financial collapse, while the wider steel industry is cutting thousands of jobs on fierce competition.
Ataer Holding has interests in the steel industry, as the largest stakeholder in Turkey's Erdemir.
OYAK was set up in 1961, a year after the first military coup in modern Turkey, and has almost 363,000 members.
The fund's total assets were worth $19.3 billion in 2018.
British Steel is on its way to coming under Turkish ownership
Seeing their future in British Steel again