The troubled Japanese electronics giant has had deep recent losses and has been selling pieces of its operations to ensure its survival.
Tokyo-based Toshiba said on Wednesday the board of directors selected the consortium of Innovation Network Corp of Japan, Bain Capital Private Equity and the Development Bank of Japan as the preferred bidder in the sale of Toshiba Memory Corp.
The company's US Westinghouse nuclear operations have racked up massive red ink. Reactors it has been building are still unfinished, partly because of beefed up safety regulations following the 2011 Fukushima nuclear disaster.
Westinghouse Electric Co filed for bankruptcy protection in March.
Toshiba's attempt to gain cash from the chip operations sale has not gone smoothly.
Western Digital of the US, which has acquired some SanDisk chip operations, including a joint venture with Toshiba in Japan, reiterated its opposition to such a move. It said in a statement that Toshiba "has no right" to transfer the joint venture without its consent.
It said it filed a request for arbitration last week. Toshiba has accused Western Digital of interfering with its sales efforts. Such sales can be sensitive because they involve the transfer of technology.
Others had also expressed interest, including Hon Hai of Taiwan, also known as Foxconn, a major supplier to Apple, which has acquired Japanese electronics company Sharp Corp.
Toshiba wants to reach an agreement with the consortium and clear legal and other procedures before its June 28 general shareholders' meeting.
The Innovation Network Corp. Of Japan is made up of 26 big-name Japanese corporate investors, including Sony Corp., Canon Inc., Toyota Motor Corp. And Sumitomo Mitsui Banking Corp. Bain Capital Private Equity, based in Boston, is one of the world's leading investment firms. The Development Bank of Japan is backed by the government of Japan.