Reading are in “exclusive negotiations” with a buyer after owner Dai Yongge committed to a letter of intent.

Both parties will now try to agree the final terms which could take up to two months, the League One club confirmed.

The sale will include Dai’s shareholding in the Royals, the stadium and Bearwood Park training ground.

Reading, who are six points above the drop zone, have had six points deducted this season for financial breaches while Dai tries to sell the club.

BBC Sport understands one of the interested parties – Genevra Associates – are no longer in negotiations, as they were not willing to lend money to the club prior to English Football League approval.

This money would have covered the shortfall that was present in March’s financial accounts at the club, which stands at about £1m.

Fan-led protest group Sell Before We Dai are still planning to raise awareness about “football’s ownership problem” at Wembley on Tuesday.

They have bought an advertising van to stand outside the stadium before England’s international friendly against Belgium, circling the roads around the stadium to put the spotlight on the situation at Reading.

In a statement published on Tuesday, the supporter group shared their optimism at the announcement.

“Naturally we are delighted to see movement on the sale of the club,” they said.

“As always with statements from Mr Dai, it provides as many questions as answers.

“This season we have been on an emotional rollercoaster, we implore the potential buyer to reach out when they can and provide reassurances.”

Reading said completion of a deal is expected to take up to two months, and the purchaser’s identity would not be confirmed before then.

News marks significant progress – analysis

Tim Dellor, BBC Radio Berkshire’s Reading commentator

This news will be felt around the country.

Today is a significant day, we are seeing some light at the end of the tunnel after a difficult few years.

The bills can now be paid by the new party which is important, it’ll calm everyone down and hopefully the takeover will come to fruition.