The deal offers a nuclear foothold for RWE in the Netherlands at a time when a big question mark hangs over its aspirations in Germany, where Chancellor Angela Merkel has reversed a decision to extend the life of nuclear plants.
Delta had challenged RWE's 50 percent ownership of the Borssele plant in the southwest of the Netherlands, which RWE inherited through its takeover of Dutch peer Essent in 2009.
Delta's challenge was on the grounds the plant should not be owned by a listed company.
"We have signed a memorandum of understanding with Dutch utility Delta," an RWE spokesman said.
Delta said in a statement that the deal, which would have to be approved by its shareholders in June and then finalized with RWE this year, ended a long impasse over Essent's stake by securing public sector majority control of the plant.
"For us it is essential that the public interest in both the first, and second nuclear power plant to be built, is secured," Delta Chief Executive Peter Boerma said in the statement.
RWE had agreed to pay 950 million euros less to exclude the nuclear plant from its acquisition of Essent while it fought for the stake, which had stayed in the hands of Essent's public shareholders Dutch provinces and local authorities.
RWE said that under the agreement it would reduce its stake in the 485-megawatt plant from 50 percent to 30 percent, raising the shareholding of Delta, which is owned by local Dutch municipalities, from 50 to 70 percent.
A source with direct knowledge of the deal said RWE would pay 609 million euros for the 30 percent stake to Essent's previous shareholders, confirming an earlier report in Dutch financial daily Financieele Dagblad.
Dutch confidence in nuclear energy has been shaken by the disaster at the Fukushima plant in Japan, though the Dutch government intends to push ahead with plans to build a second nuclear power plant in Borssele.
The plan calls for awarding a license by 2014 for the second power plant with maximum capacity of 2,500 megawatts. Delta has already teamed up with French energy giant EDF to explore the development of the project.
Delta said that if the deal is approved, RWE may participate with a 20 percent stake as a partner in the second nuclear plant in Borssele. An RWE spokesman said the company had not yet decided on whether it would take part.