The deal will allow Reynolds American to focus on growing its brands in the United States, Chief Executive Susan Cameron said in a statement.
JT wants to become the world's biggest cigarette maker, overtaking first and second-ranked Philip Morris International and British American Tobacco.
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The Natural American Spirit brand has enjoyed strong growth in the United States, Japan, Germany, Switzerland, Italy, Spain, the U.K. among other markets, JT said.
Bloomberg first reported about the possibility of the deal last week and the Nikkei reported earlier on Tuesday that an agreement could be reached this week.
J.P. Morgan Securities and Lazard are Reynolds American's financial advisers and Jones Day its legal adviser.