The real estate conglomerate Arab Real Estate Agency (ARA) is set to buy an Arab land in Israel.
The move comes as Israel has begun negotiations with the Palestinians to create an independent Palestinian state.
The realty firm has been working with the government to develop a partnership for a multi-billion-dollar project that would include an Arab village in the West Bank.
It is expected to have its first meeting in the coming weeks.
The land deal comes just a few months after Israeli Prime Minister Benjamin Netanyahu announced that he would create a Palestinian state in a deal that could eventually be announced.
The acquisition is expected at a price tag of at least $4 billion.
The deal with the Arab Real estate Agency (ARA) comes after Netanyahu signed a peace agreement with the Palestinian Authority in 2016 that would establish a Palestinian government in the occupied territories.
Netanyahu has repeatedly called for a separate state for the Palestinians.
Israel and the Palestinians have reached a deal to create a joint government in which the PA would manage the Palestinian territories, and Israel would manage its own settlements and border crossings.
The Palestinian Authority, however, has rejected this arrangement and accused Israel of pursuing unilateral moves.