Toshiba Corp. and Western Digital Corp. reached a broad accord on the sale of the Japanese conglomerate's chip unit as the U.S. company has agreed to drop its legal actions, sources close to the matter said Monday.

The prospect emerged as Western Digital CEO Steve Milligan arrived in Japan to meet with Toshiba's Satoshi Tsunakawa to discuss a deal crucial to Toshiba's restructuring efforts.

Milligan has also met with officials of the Ministry of Economy, Trade and Industry, the sources said. The CEO is expected to continue to make final arrangements with Tsunakawa.