Seattle and a development group have reached an agreement on a $600 million, privately financed renovation of KeyArena that would make it a suitable home for an NBA and NHL team.

Oak View Group, a Los Angeles-based group led by former pro sports team executive Tim Leiweke, would break ground on the project next year with completion of the arena slated for 2020, according to the memorandum of understanding that will be submitted to the Seattle City Council on Tuesday.

The announcement comes after several weeks of negotiations and ahead of a deadline set by the Seattle City Council. An approval of the memorandum of understanding draft is targeted by year's end, The Seattle Times reported Tuesday.

The city is offering a 39-year lease to OVG with two eight-year renewal options. In return, the city would receive base rent equivalent to the net revenues that Seattle currently gets from KeyArena.