The long-awaited change in ownership of the Southdown electricity generation plant in Auckland is about to be settled.

TransAlta and Mighty River Power are understood to have agreed to a 50/50 joint venture for the cogeneration plant.

The catalyst was last week's sale by Orion of its 5 per cent stake for $8.5 million to the existing 47.5 per cent partners, TransAlta and Vector.

Electricity legislation requires Vector, as a lines company, to sell its generation assets.

Selling to Mighty River - one of the three baby ECNZs - is said to have been part of the original deal for the former Mercury Energy's retail assets with the Electricity Corporation.

What held up the move was the pre-emptive rights held by the existing partners.

Orion and TransAlta had to decide whether they wanted to waive those rights before Mighty River could come in.

It is understood an announcement is due in the next few days by listed company TransAlta in which NGC is about to become the major shareholder.

Orion's decision to sell was announced last week as it confirmed the $550 million sale of its North Island gas networks to UnitedNetworks.

Southdown is Vector's last generation asset after the sale of the McLachlan geothermal plant near Taupo to Contact and its one-third share in the Taranaki combined cycle plant at Stratford to TransAlta.

Last year Vector reported losses of up to $500 million on asset sales.