News Corp. plans to buy Long Island's Newsday newspaper which belongs to Tribune Co. for $580 million, anonymous sources said today.

Through the agreement News Corp. would combine its New York Post newspaper with Tribune's Newsday to lower costs of printing and distribution and help the New York Post to be competitive against the NY Times for advertising.

The deal through which the papers will combine could erase debts of the New York Post of as much as $50 million of annual losses at the time that will help Sam Zell, Tribune Corp. Chief Executive to erase a debt over $10 billion.

News Corp would own most of the company and Tribune would have a small percentage stake, according to people familiarized with the matter.

However the deal is not officially announced and U.S. government regulatory issues could also be involved in the merge.

Under the leadership of Rupert Murdoch, News Corp. bought The Wall Street Journal for $5.2 billion in December. In the East cost Murdoch owns Fox affiliate WNYW-TV and the New York Post.

Sam Zell at the head of Tribune Corp. owns Los Angeles Times and Chicago Tribune.

Shares of News Corp. fell 2.71 percent to $17.96 on the New York Stock Exchange closing trade Tuesday.

Shares of Tribune Co. closed falling 2.83 percent to $35.72 on Tuesday in the New York Stock Exchange.