Dell Technologies plans to announce an acquisition of its publicly traded tracking stock that mirrors the performance of VMware, in a cash-and-stock deal as early as Sunday, people familiar with the matter told CNBC.

The deal, which was also reported by The Wall Street Journal, will eliminate the tracking stock but will leave VMware unaffected. It temporarily concludes months of deliberation about strategic options from Dell and its board.

Dell will offer DVMT shareholders "significantly" more DHI common stock (Dell's privately held shares) than cash, said the people, who asked not to be named because the discussions are still private. Dell will become a publicly traded stock as a result of the deal. DVMT will be acquired at a premium in line with standard transactions, the people said.

The transaction will give Dell Technologies more direct control over VMware's fate. VMware is more than 80 percent controlled by holders of the Dell tracking stock (Dell's Class V shares) and Dell's DHI shareholders (Michael Dell and Silver Lake).

Upon completion of the deal, Dell Technologies will assume that control directly over VMware. That could lead Dell to pursue a merger with VMware down the road, said the people. In that sense, a deal for DVMT could be seen as step one in a two-step deal, the people said.

Dell's initial plan to roll up into VMware couldn't be done at this time because of resistance from VMware's board and special committee, the people said.

VMware will pay a $9 billion dividend to DVMT holders as part of the deal announcement, said the people. Dell will use proceeds from the dividend to pay out its tracker holders. DVMT holders will get a shareholder vote on the deal, the people said.

Dell considered several other transactions since January, including going public and pursuing a reverse merger with VMware. Dell has wanted to simplify its capital structure, give its private holders a publicly traded currency and increase its ownership of VMware.

Back in May, Dell hinted at a stock deal with owners of DVMT, which has a market capitalization of about $17 billion.

A Dell spokesman couldn't immediately be reached for comment. A VMware spokesman declined to comment.