Wisconsin state representative John Nygren told the AP that his budget committee hopes to announce the deal on Wednesday.
The arena is expected to cost $500 million to build, with Bucks ownership contributing $150 million. Former Bucks owner Herb Kohl, an ex-United States senator, will pay $100 million. The remaining $250 million will be publicly funded, including up to $220 million from the so-called "jock tax."
The Bucks revealed plans for 17,000-seat arena in April to replace the BMO Harris Bradley Center. The Bucks have played at the Bradley Center since it opened in 1988.
Kohl sold the team last April and the new owners, Wesley Edens and Marc Lasry, vowed to keep the team in Milwaukee. The team's small-market status and aging arena had fueled rumors that it could be relocated if it was sold.
- Dan Gartland