Malaysian firm Weststar is said to be on the verge of taking over LDV after the troubled van maker was offered a £5m four-week loan from the government.
Negotiations between the company, LDV and UK government officials continued into the night to finalise the deal and avoid administration.
The company had been set to go into administration on Tuesday, raising redundancy fears for 850 workers.
Thousands working at other companies would also have lost their jobs.
Business minister Ian Pearson said a sale to Weststar offered a chance of keeping the factory in the UK.
A deal would bring some rare good news for the beleaguered motor industry, which has been battered by the recession.