NEW YORK - The Marlboro man is going to China .

Altria Group Inc. (MO), parent of Philip Morris, is close to signing a deal with the Chinese government allowing Marlboro to be manufactured and sold in China, the world's largest cigarette market, people familiar with the situation told The Wall Street Journal.

The deal would give Philip Morris International a vital foothold in a market that is not only enormous -- accounting for nearly a third of all cigarettes smoked world-wide -- but still growing. In contrast, in the U.S., the tobacco industry faces declining sales and eroding profits as a result of longstanding health concerns, litigation and widening smoking bans.

A deal would also suggest that the Chinese government may be moving more aggressively to open up the tobacco market. China has been off-limits to Western tobacco companies for decades but in recent years has taken steps to gradually open the door to foreign players, at least partly in the hope of helping Chinese tobacco companies break into foreign markets.

Details of the deal are still being hammered out, and the entire agreement could still unravel. But according to a person familiar with the talks, the arrangement being negotiated would allow the famed Marlboro brand to be made under a licensing agreement by two of China's largest state-run tobacco companies. Philip Morris has provided technical assistance and may be paid royalties on packs sold, according to the person familiar with negotiations. Financial details weren't available.

-Wall Street Journal Staff Reporters Nicholas Zamiska and Vanessa O'Connell contributed to this article. Dow Jones Newswires 04-21-05 0522ET Copyright (C) 2005 Dow Jones & Company, Inc. All Rights Reserved.