IBM is said to be selling its x86 server business to Lenovo, the Chinese company which bought IBM's PC business.
It is thought that the x86 part of IBM's total server business represents about a third of the server division's $15 billion sales.
IBM, with 15% of the server market last year was the No. 3 player after HP on 32% and Dell on 21%.
Lenovo had x86 server sales of $360 million last year - double its 2011 sales - and says it wants to be China's largest server supplier.