Mitsubishi UFJ, Japan’s largest megabank, is poised to pay least $9 billion (£4.8 billion) for a stake of up to 20 per cent in Morgan Stanley, the troubled Wall Street lender.

The Mitsubishi UFJ deal is expected to leave the Japanese bank with a stake of between 15 per cent to 20 per cent in Morgan Stanley. Mitsubishi UFJ is expected to make a decision on the exact price it will pay for the stake once it has completed due diligence.

The deal is the second struck within the last 24 hours in which a leading Japanese financial group has swooped on the troubled titans of Wall Street.

Earlier in the day, sources at Nomura confirmed that the brokerage house would be buying the Asian and European businesses of Lehman Brothers.

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A deal with Mitsubishi UFJ will allow Morgan Stanley to keep its independent status after a tumultuous week on Wall Street in which Lehman Brothers went bust, Merrill Lynch was acquired by Bank of America and the US Government unveiled a $700 billion bailout to rescue the creaking US banking system.

It is understood that Morgan Stanley had been in talks with Wachovia, America's fourth largest bank, as well as China Investment Corporation, the Chinese sovereign wealth fund.

The deal has emerged hours after Morgan Stanley and its rival, Goldman Sachs, signalled the end of an era on Wall Street by abandoning their status as investment banks.

The two investment houses yesterday received the regulatory approval to transform themselves into traditional bank holding companies.

While the change appears to be a technicality, it means that both banks have equal and permanent rights to access emergency funds from the US central bank, the Federal Reserve. They will also be far more tightly regulated.

As revealed earlier this month by The Times, Mitsubishi UFJ has been increasingly keen to invest in the distressed “platinum” brands of the US financial sector.

Having escaped with only light financial damage from the sub-prime chaos and the credit crunch fallout, Japanese banks have emerged as some of the strongest potential bidders as the financial crisis continues to produce victims and the price of snapping up a premium international Wall Street name has plunged.

For months, Japanese banks have been preparing large warchests of cash with which to jump on any opportunity that arises. “We are now finally seeing the advantages of being boring, conservative and keeping our powder dry,” one senior Mitsubishi UFJ source told The Times.

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