Pirelli's largest shareholder, Camfin, which owns about a quarter of the company, said on Sunday that it had signed a deal with the Chinese state giant ChemChina, whose annual revenue tops €70 billion ($75 billion).
The deal for "a long-term industrial partnership for Pirelli" will see the creation of a new company called Bidco indirectly controlled by the Chinese "in partnership with Camfin".
"The headquarters and know-how of Pirelli will remain in Italy," a Camfin statement said.
It added that a very large majority of shareholders would be needed for the company to be moved overseas, with Italian media saying that would mean getting the agreement of 80 percent of shareholders.
Chairman Marco Tronchetti Provera is to stay on as chief executive of the group with the Chinese naming a new chairman of the board. "The partnership with a global player like ChemChina... represents a big opportunity for Pirelli," he said.
Pirelli began business in Milan in 1872 by making bicycle wheels before moving into the nascent car industry.
Now a mainstay of the Formula One racing circuit, Pirelli is equally well known for its calendars that have featured stars including Sophia Loren, Brigitte Bardot and Penelope Cruz.
ChemChina are to pay €15 ($16) a share for Pirelli stock, as had been widely predicted, valuing the company at more than €7 billion.