The purchase would grant the world's top financial services company unusually large influence over a single medium-sized Chinese lender, at a time when local interests complain that foreign firms are acquiring stakes in Chinese banks on the cheap.
Six officials from the bank regulator, the central bank and the Guangdong provincial government made their decision during a closed-door meeting at Guangdong Bank's headquarters in Guangzhou late on Thursday, a source close to the Chinese bank and a second source familiar with the deal told Reuters on Thursday.
Bidders had been informed of the group's decision in Beijing on Friday, which now awaited final cabinet approval, said a third source who attended meetings in the capital aimed at briefing the parties involved.
The six-person group would submit minutes of Friday's meeting to the cabinet, or State Council, within days.
Citigroup will kick off exclusive negotiations with Guangdong Bank as early as next week on technical areas including staff benefits, IT support and new management, two sources said.