Sarah Tew/CNET

Microsoft has reportedly offered to pay as much as $1 billion to buy out the digital assets of Nook Media, the e-book joint venture between the software giant and bookseller Barnes & Noble.

Under the plan, according to internal documents obtained by TechCrunch, Microsoft would purchase preferred units in the joint venture, which includes a college textbook division, while leaving Nook Media with the e-book and e-reader operations.

The documents also reportedly outline plans to discontinue its Android-based tablet business next year as it transitions to a strategy that focuses on licensing content to third-party developers. The bookseller had acknowledged earlier this year that sales in its Nook segment for the key holiday shopping season were much lower than expected but denied reports it was planning to exit the hardware business.

A Barnes & Noble spokesperson declined to comment. CNET has also contacted Microsoft for comment and will update this report when we learn more.

Microsoft and Barnes & Noble announced a partnership in April 2012 that saw the software giant invest $300 million in the Nook unit that combined the company's digital and college text businesses, giving Microsoft 16.8 percent of Nook Media and Barnes & Noble a 78.2 percent ownership stake.

The partnership included plans to develop content for Microsoft's Windows 8, its next-generation operating system that was not yet released at the time, and settled all patent litigation between the two companies related to use of Android on the Nook tablet.

B&N had expected its Nook business to generate greater demand in the face of lower sales from its retail chains, but rising product development and marketing costs have reportedly cut into Nook's contributions.

The ailing Nook unit dragged down the bookseller's earnings in its third fiscal quarter, contributing to an 8.8 percent decline in revenue compared with the same period a year earlier. Meanwhile, the company's earnings before interest, taxes, depreciation, and amortization slumped 63 percent year over year.

The company will hold a conference call at 1 p.m. PT on June 18 to discuss its fourth-quarter results. But many of the questions will undoubtedly focus on the future of its Nook business.