The world's top steelmaker and its Italian partner offered just under 2 billion euros (£1.74 billion) for the loss-making plant, Europe's biggest by output capacity, the source said.

Italy has been trying to sell Ilva, based in the southern port city of Taranto, since 2015, when the state took over to clean up the polluted site and save thousands of jobs in an economically depressed area.

The special commissioners in charge of the company chose the ArcelorMittal bid over a rival one from a group including India's JSW Steel, the source said.

Their decision now needs to be passed on to Italy's industry ministry, which will issue a decree to ratify the decision.

(Reporting by Massimiliano Di Giorgio; Writing by Isla Binnie)