The supermarket has been in a battle with EG Group, owned by the billionaire Issa brothers, the BBC reports.
McColl's is poised to go into administration, but will immediately be sold to a new owner.
The chain employs 16,000 at 1,400 stores including hundreds at 17 in South Yorkshire.
Morrisons is a wholesale supplier to McColl’s. It also has a deal to convert hundreds of McColl's shops to Morrisons Daily convenience stores.
McColl’s in Sheffield include Rural Lane, Wisewood; Ecclesall Road South, Hutcliffe Wood Road, Margetson Crescent, Low Edges Road and Green Lane, Dronfield.
It also has stores in Rotherham at Whitehill Lane; St John’s Green and Oaks Lane, Kimberworth Park; Broom Valley Road, Kilnhurst Road, Fleming Way and Wales Road.
It also has Green Spring Ave, Barnsley; Cuttholme Way, Loundsley Green, Chesterfield; Union Street, Harthill and Thomas Street, Swinton, Mexborough.