The agreement requires TikTok's US assets to be transferred to local owners from China's ByteDance, potentially resolving a saga that has lingered for nearly a year.
A deal for the popular social media app, which counts 170 million US users, would represent a breakthrough in months-long talks between the two biggest economies as they seek to defuse a wide-ranging trade war that has unnerved global markets.
"We have a deal on TikTok ... We have a group of very big companies that want to buy it," Trump said at a White House briefing, without providing further details.
Li Chenggang, China's international trade representative, told reporters the US and China have reached "basic framework consensus" to co-operatively resolve TikTok-related issues, reduce investment barriers and promote related economic and trade co-operation.
The announcement comes a day before a September 17 deadline to sell or shut down the short video app.
Later in the day the White House extended that deadline until December 16.
The White House declined to provide any further details on the agreement with China.
The United States entity will have a US-dominated board, the Wall Street Journal reported, with one member designated by the US government.
The basics of the new deal, also similar to April, include that ByteDance will keep the single largest ownership stake at 19.9 per cent, just under the law's 20 per cent threshold, two of the sources said.
While the broad terms are expected to remain the same, the sources did say they do not know what the final deal would exactly look like given the potential for last-minute changes.
US Treasury Secretary Scott Bessent told CNBC on Tuesday the commercial terms of the deal had, in essence, been done since about March with just a few details left to be ironed out.
"This deal wouldn't be done without proper safeguards for US national security," Bessent said.
"It seems as though we were also able to meet the Chinese interest."
CNBC reported on Tuesday that the deal is expected to be closed within the next 30 to 45 days, and that the agreement will include existing investors in TikTok's China-based parent ByteDance and new investors.
A deal for TikTok, which had been in the works in the spring, was put on hold after China indicated it would not approve it following Trump's announcements of tariffs on Chinese goods.
The United States has said that TikTok's ownership by ByteDance makes it beholden to the Chinese government.
But the company has said US officials have misstated its ties to China, arguing its content recommendation engine and user data are stored in the US on cloud servers operated by Oracle while content moderation decisions that affect US users are also made in the country.
A framework agreement was reached by officials from both countries on Monday.
A final confirmation on the deal is expected on Friday in a call between Trump and Chinese President Xi Jinping.
with AP
