Toshiba is planning to sell to Sony its image sensor business for about ¥20 billion, which is equivalent to around $165 million, as part of the restructuring plan that the company revealed earlier in the year, according to sources that are familiar with the matter.

Toshiba, which owns businesses ranging from laptop computers to nuclear power, is currently undergoing restructuring after revealing earlier in the year that it has overstated the company's earnings by about $1.3 billion since fiscal year 2008-2009.

Toshiba's image sensor division has been under its system LSI semiconductor business, with the components being used for devices such as smartphones and digital cameras. The company is now looking to offload its manufacturing plant for image sensors, located in the Oita prefecture of southern Japan, and then exit the image sensor industry altogether, according to the sources.

The sources added that the finalization of the sale to Sony is likely to occur soon. A Sony official, however, declined to comment when asked regarding the reported deal.

Toshiba is said to be considering a variety of options for the company's system LSI semiconductor business, along with its discrete semiconductor business. Discussions are ongoing on what the company would do with the businesses, according to an official of Toshiba.

Toshiba CEO Masashi Muromachi, who took over the company's leadership after the revelation of the accounting scandal, previously made a promise to restructure the company's businesses which are returning low margins. The sale of Toshiba's image sensor division would signal the start of the promised restructuring.

Sony, on the other hand, already has a dominant presence within the image sensor industry, with the company being the leading supplier for CMOS image sensors that are used for cameras in smartphones and some DSLR models with a market share last year of 40.2 percent. The acquisition of Toshiba's image sensor business would further strengthen the company's position against rivals such as Samsung, in addition to the expansions that it has carried out worth $1.2 billion in its image sensor plants in Yamagata and Nagasaki.