Both parties' ruling bodies will meet on Saturday to decide whether or not to approve the deal.
It could still be rejected, or further talks demanded, but if agreement is reached, an announcement could be made as early as Monday.
It also includes expansion of free childcare, measures to tackle second homes and many other issues.
Labour won the Senedd election in May, but did not win a majority.
First Minister, Mark Drakeford, has previously explained the talks were necessary because Welsh Labour has no overall majority to deal with "challenging and ambitious issues".
Talks were publicly announced in September after Labour and Plaid Cymru had been in discussion over the summer around policies they could work together on.
In mid-October, Mr Drakeford said the "discussions need to come to a conclusion" and they could not "continue forever".
The First Minister told ITV Wales National Correspondent, Rob Osborne: "Those discussions have been detailed, they have focused on a common policy programme that might be agreed between us and then machinery of government that would lie behind it.
"We have concluded those discussions - they are now being reported through our respective parties as they need to be.
"We are looking to see whether we can have a wider agreement behind them. We are in the middle of that process rather than at the end of it. If it succeeds, then there will definitely be things to report.
"There are discussions, I hope, to be concluded over this weekend. If they're concluded successfully then my aim would be to put into the public domain things that we have discussed and agreed in the early part of next week."
The two parties have worked together in the Senedd before - Plaid Cymru went into coalition government with Labour between 2007 and 2011.
After the 2016 election, the party agreed to a "compact" co-operation deal with Labour, allowing Carwyn Jones to return as first minister.
That ended in 2017, although Plaid supported the Welsh budget a year after that.
ITV Wales Political Editor Adrian Masters
There is much at risk for both parties in any deal but much to be gained if it pays off. For Labour, the prize is stability and a chance to set aside the ever-present possibility of defeat on a serious issue.That’s something Mark Drakeford is well aware of but if anyone on the Labour side had forgotten, the vote on covid passes last month will have reminded them of the situation they inhabit.In that vote, Plaid Cymru’s decision to oppose the proposal should have led to it being blocked. It was only the failure of a single Conservative MS to vote that saved Mark Drakeford’s bacon.Yes, he could continue to gamble on the opposition not being able to agree, but over a period of years that will cause pressure ensuring the numbers always add up.One possible danger of a deal for Labour is that it is seen as being dragged onto Plaid Cymru’s agenda.There are those who say that’s already happened and certainly, Welsh Labour ministers are increasingly willing to assert Wales’ constitutional difference.Plaid Cymru has clearly learned from its experience in the One Wales coalition governments and is resisting taking the final step of having ministers in a coalition with the collective cabinet responsibility that entails.We will have to await the details of how the proposed model of having special advisers but not ministers will work because it’s an untested model.It will of course lead to a ‘Plaid-ification’ of the Welsh Government’s policy programme and today has given us an idea of what that will look like.But without ministers, how will Plaid Cymru claim credit for its policies or face scrutiny for them if they go wrong? If they go well, won’t Labour be able to claim them as their own?How free will the party’s leaders be to criticise and vote against other Welsh Government policies?These are some of the questions members of both parties will be asking over the weekend. Hopefully, there’ll be some answers by Monday.