Under the memorandum of understanding (MOU), the businesses of Daimler-owned Mitsubishi Fuso Truck and Bus Corp and Toyota subsidiary Hino Motors Ltd would be combined under a holding company, they said in a statement.
The shares of the new company are expected to be listed on the Prime Market of the Tokyo Stock Exchange.
Daimler Truck and Toyota will invest in the company equally and cooperate on the development of hydrogen and other technologies in areas such as connectivity and autonomous driving, the statement said.
The companies expect to sign a definitive agreement in the first quarter of 2024 and close the transaction by the end of next year, they said.
Last year, a committee tasked with investigating an emissions scandal at Hino, which became a Toyota subsidiary in 2001, found that the truck and bus maker had falsified emissions data going back to 2003.
The heads of the four companies will hold a joint news conference in Tokyo at 4:30 p.m. (0730 GMT).