Magna and its Russian partner Sberbank have reached agreement in principle with General Motors management over a contract to buy a stake in GM's European unit Opel, Magna's co-CEO Siegfried Wolf told Reuters on Thursday.

The boards of directors of GM and Canadian automotive group Magna still need to approve a deal before trustees who control a 65 percent stake in Opel can give their final consent.

The agreement, which follows weeks of hard bargaining, does not necessarily mean that competing Opel bidder, Belgian private equity firm RHJ International, is out of the race, however.

GM's chief negotiator on the deal, John Smith, has said RHJI has already reached an agreement with GM management on Opel. Now it is up to GM's board and Opel trustees to pick one of the two rival offers.

RHJ was not immediately available for comment on the matter. Both Sberbank and Magna's potential industrial partner GAZ declined to comment.

But the overwhelming support for Magna in Germany from key figures such as Chancellor Angela Merkel and state leaders suggests that the Opel Trust will likely sign off on a deal with the Canadian auto parts supplier and Russian lender Sberbank.

This is the best solution for Opel and Opel workers, top politicians in the German state of Rhineland-Palatinate, which hosts one of four Opel plants in Germany, said in a statement.

GM Europe said the company would review revised draft agreements on an Opel deal presented on Thursday by Magna and Sberbank, stopping short of saying the remaining issues between GM, Magna and Sberbank had been resolved.

GM's CEO Fritz Henderson later said the company would evaluate the revised Magna offer over the next several days.

GM also said it had asked the Opel task force created by the German government to outline a financing package that Germany and other European states hosting Opel plants would support.

Berlin, worried about the 25,000 Opel jobs in Germany, put up 1.5 billion euros ($2.1 billion) in bridge finance for a ring-fenced Opel in May, just before the U.S. parent slid briefly into bankruptcy.

A deal with Magna would be a relief for Merkel, who is keen to avoid the prospect of mass layoffs before a September 27 election.

She and the premiers of the four German states that house Opel plants have publicly backed Magna, arguing it offered a more sustainable plan for Opel, including expansion of the car assembly business.

The RHJ bid, by contrast, aims to shrink production to return Opel to profit.

Magna is in the middle of negotiations over the financing for a deal, which includes an equity component of 500 million euros, along with 4.5 billion euros in loans guaranteed by European governments.

(Additional reporting by Anne Jolis, Madeline Chambers and Dmitry Zhdannikov, editing by Will Waterman)

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