SoftBank's investment had valued Flipkart at about $14 billion.
The deal with Walmart will give Flipkart much-needed oxygen to fight against Amazon India, where world's richest man and owner Jeff Bezos has committed to invest $5 billion in India as it plans to expand aggressively in the online space including its online grocery deliveries and retail store business.
According to the report, Mayank had quit Flipkart in July a year ago.
"Walmart will get board seats on Flipkart for its global ecommerce CEO (Marc Lore) and worldwide CEO (Judith McKenna) and not touch the existing management team", said one of the persons cited above. This would enable the American retail giant to open retail outlets in the country which it now can not do directly because of certain FDI restrictions on overseas investment.
The due diligence for the deal is likely to begin this week, according to the Reuters report.
At present, Flipkart controls almost 40 percent of India's online retail and is ahead of Amazon India. It runs 21 wholesale stores in India.
SoftBank's objections to a Walmart investment in Flipkart have also been reported by Mint.
If Walmart's negotiations with Flipkart materialise, purchases of grocery and consumer goods on Flipkart could be handled also via Walmart's wholesale stores, improving product availability and delivery speed for the online retailer.
Walmart's current negotiations with Flipkart are expected to mirror the schematics of its investment in JD.com, under which the Tencent-backed Chinese company's management then wasn't disturbed.
"As large as they (Walmart) are, Amazon has eaten away a significant chunk of their revenues and I think.they view India as the largest market possibly for this (taking on Amazon)", a source said, as mentioned in agency reports.