According to the Sunday Times, Royal Bank of Scotland, which took control of the property in 2001 when it paid 1.2 billion pounds for 12 Le Meridien hotels as part of a sale- and-leaseback deal, has agreed to sell Grosvenor House Hotel to Subrata Roy for a knock-down price.
The five-star hotel will be sold for about 470 million pounds, the report said.
Sahara is believed to be taking advice from consultants DTZ and Blandford Goldsmith on the real estate deal.
RBS had originally hoped to get as much as 700 million pounds from the sale, but lowered its target after two previous auctions failed.
RBS has been trying to offload the site for three years. Grosvenor House was built in the 18th century and became the Duke's London home in 1806. It was commandeered by the government during the First World War before being knocked down and rebuilt in 1927.
Sahara, which has been in exclusive talks with the state -backed bank since mid-October, is understood to have already handed over a deposit for the property.
If all goes smoothly, the deal is expected to be inked before Christmas.
Both parties declined to comment on the deal.