The all-cash deal, which values Salix at about $10.1 billion, could be announced as soon as Sunday, according to these sources, who requested not to be identified.
A deal of that size would be the largest ever for Valeant, which lost a takeover contest for Allergan Inc. last year.
Valeant moved quickly in due diligence to get the deal done as other potential suitors moved much more slowly, according to sources.
A Valeant spokeswoman declined to comment. A request for comment from a Salix spokesman was not immediately returned.
Shares of Salix jumped nearly 5% yesterday after CNBC first reported the two companies were close to a deal.
Salix is working with advisers to consider its options in the midst of a management shakeup and inventory issues. Last November, Salix announced that supply levels for its irritable bowel syndrome drug, Xifaxan, and other drugs were higher than it had previously indicated, forcing it to slash its full-year earnings forecast. —Reuters contributed to this report