Goldman Sachs is close to a striking a deal with State Street Corp over the sale of its hedge fund administration business, in a move that would create the largest administration services provider to hedge funds worldwide, the Financial Times reported.

The report, citing people familiar with the sale, said the investment bank is in "late stage" discussions with State Street, although no formal agreement has been reached.

The combined business would have funds under administration of close to $700 billion, overtaking current market leader Citco, the report said.

Goldman Sachs has been exploring the sale of the business, which is currently ranked fourth and looks after assets of about $200 billion, for several months and has spoken to a number of potential acquirers, the report said.

A Goldman Sachs spokesman declined to comment.

(Reporting By Nadia Damouni; Editing by Chris Gallagher)