The investment division of Turkey's armed forces pension fund is the preferred bidder for British Steel, the Government's Insolvency Service has revealed.
Investment vehicle Ataer Holding will now be given several weeks to allow its advisers to comb through British Steel's business before any deal is made official.
The Official Receiver has entered exclusive talks with Oyak, which controls Ataer, after revealing he received several approaches for the business.
He said: "Following discussions with a number of potential purchasers for the British Steel group over the past few weeks I am pleased to say I have now received an acceptable offer from Ataer Holdings AS for the purchase of the whole business and I am now focusing on finalising the sale.
"I will be looking to conclude this process in the coming weeks, during which time British Steel continues to trade and supply its customers as normal. I would like to thank all employees, suppliers and customers for their continued support which has been essential to get to this point."
The news is expected to be welcomed by British Steel's 5,000 staff, including 4,000 at its plant in Scunthorpe, and a further 700 on Teesside in north-east England.
The company is also indirectly responsible for 20,000 workers in the supply chain and produces around 2.5 million tonnes of steel a year.
Ataer, which invests funds for the Turkish Armed Forces Assistance Fund - or Oyak - already owns nearly 50% of Turkey's biggest steel producer, Erdemir.
However, there has been criticism that the company is too close to the Turkish government and lacks accountability.
British Steel was put into compulsory liquidation in May after talks between previous owners Greybull and the Government collapsed, leading the business to be run by the Official Receiver.
Previous reports had suggested that Oyak wants to buy British Steel as the first step to buying up steel assets across the world.
Gareth Stace, UK Steel director general, welcomed the news and warned the loss of British Steel would have hit manufacturing hard.
He added: "The UK steel sector has a potentially bright future, underpinned by increasing UK and global steel demand for our products, but the Government must recognise the need to address the business environment in the UK which currently undermines our competitiveness.
"The steel industry is ready to invest in its future in the UK, all it requires is a partnership with the Government to help deliver a level playing field that can unlock its potential."