The announcement came ahead of a widely tipped restructuring of News Limited to streamline its print and digital operations, which reports said could come later Wednesday with big job cuts expected.
"News confirms it has put a conditional proposal to Consolidated Media, which, if implemented, would result in News acquiring 100 per cent of Consolidated Media at a cost of approximately A$1.97 billion," News said.
The company offered A$3.50 for each share of Consolidated Media, which is focused on subscription television, with the offer subject to several conditions including approval from the competition watchdog.
If successful, News would emerge from the deal with 50 per cent control of Foxtel, the country's biggest pay TV operator, and all of Fox Sports. Telstra holds the other half of Foxtel.
Like media companies worldwide, News Limited has been hit by advertisers and readers migrating from print to the Internet. Its key rival, Fairfax, announced a major overhaul on Monday, with 1,900 jobs slashed.
In a statement, Packer welcomed the proposal, which he said was a fair offer for the firm formed when Publishing and Broadcasting Ltd, founded by his grandfather Frank Packer and run by his father Kerry, changed its name in 2007.
"CPH welcomes News's proposal and looks forward to Consolidated Media and News working together to address the detailed terms and conditions," said Packer, who owns 50 per cent of the company through Consolidated Press Holdings.
If the sale goes ahead, it will be the first time in a century that the Packer family will have no media interests in Australia, apart from a small stake in the Ten Network.
Since his father's death, James Packer has moved away from the family's traditional media business and focused on creating a worldwide gaming empire.
As well as Australia, he has casino interests in Macau, the world's biggest gaming hub.
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