The Conservatives and the Democratic Unionists are expected to announce a deal that would see the DUP supporting a Tory-led minority government.
Issues like Brexit, the economy, taxation and counter-terrorism measures have been discussed by the two parties.
On Tuesday, DUP leader Arlene Foster said a deal would happen sooner rather than later.
The Conservatives are having to rely on the support of 10 DUP MPs after they fell eight seats short of winning an overall majority at the general election.
It is anticipated that there will more talks on Wednesday and then the deal will be announced.
It means that Theresa May will remain as prime minister and the DUP MPs will be central to the survival of a Conservative Party administration.
The party will offer support for key votes like backing the Queen’s Speech, the budget and a vote of no confidence.
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Analysis: BBC News NI’s political correspondent Stephen Walker
The DUP say they are acting in the national interest and doing what they say is best for the people of Northern Ireland.
But once this deal is done many questions emerge.
What was the price of the agreement? What is the timescale and how is it going to work?
The DUP are now at the centre of British politics and with that comes a level of attention they have never experienced before.
The agreement with the DUP is expected to be very different to the coalition deal agreed between the Conservatives and Lib Dems in 2010, with DUP politicians not getting cabinet jobs and their support for the majority of new legislation to be determined on a vote-by-vote basis.
The BBC’s assistant political editor Norman Smith said the DUP was likely to demand money for investment in Northern Ireland and an end to austerity.
On Tuesday, ex-Conservative PM Sir John Major said he was “dubious” about the idea and its impact on the peace process.
Sir John told BBC Radio 4’s World at One that if the party “locked” itself into a deal with one of the main parties in Northern Ireland, there was a danger the government would no longer be seen as an “impartial honest broker” in restoring the power-sharing arrangements and upholding Northern Ireland institutions.
Asked about Sir John’s comments during a trip to Paris, Mrs May said she was “absolutely steadfast” in her support for the 1998 Good Friday Agreement – which created the Northern Ireland Assembly – and efforts to revive the power-sharing executive.
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