Councillors hope a deal over the running of Swansea's Liberty Stadium could be struck before May's council elections, BBC Wales understands.
Swansea council built the £27m stadium where Swansea City FC and the Ospreys RFC have played since 2005.
Swansea City's new American owners have held unofficial talks with the council since they bought the club last summer.
The authority's cabinet approved the start of formal talks on a new Liberty Stadium lease on Thursday.
The Swans and the Ospreys currently pay a peppercorn rent to the Swansea Stadium Management Company (SSMC) - a body running the stadium which is a partnership between the council and the two clubs.
But council leader Rob Stewart said last week the SSMC structure was "not fit for purpose anymore" following the success and growth of both clubs.
Swansea City have gone from a fourth-tier Football League club to play in the Premier League while the Ospreys are Wales' most successful club since the start of regional rugby.
The Swans owners want to lease the ground and explore more commercial opportunities out of it including stadium naming rights and possible expansion.
"The council's ambition is to secure the best value for the people of Swansea from any future arrangements," said Mr Stewart.
"The current arrangements are not viable long term and do nothing to give the clubs the freedom they need to grow and succeed commercially or give the taxpayers a return on the investment made when the stadium was built - that's the balance the negotiations will try to achieve."
It is understood many of the aspects of a potential deal have already been discussed which would help to speed up the process.