The plans would see the Premier League hand over the £250-million bailout required by the Football League to stave off a financial catastrophe among its 72 clubs, BBC Sport reported.
Under the proposals, the Premier League would be reduced to 18 teams, the EFL Cup in its present form would be abolished and the Community Shield scrapped.
In addition, the top flight's voting system – where a 14-club majority is required to pass any proposals – would be changed.
It is thought English Football League (EFL) chairman Rick Parry is in favor of the plan, first reported by The Daily Telegraph.
It is understood Liverpool's owners, the Fenway Sports Group, came forward with the initial plan, which has been worked on by United cochairman Joel Glazer. It is anticipated it will receive the backing of Arsenal, Chelsea, Manchester City and Tottenham Hotspur – the other members of England's 'big six'.
The idea is to address long-standing EFL concerns about the huge gap in funding between its divisions and the Premier League by handing over 25 percent of the annual income.
There would be a £250-million upfront payment to address the existing crisis created by the coronavirus pandemic. In addition, the Football Association would receive what is being described as a £100-million "gift".
No date has been set for the proposed new-style league to be in operation but sources have suggested 2022-23 is not out of the question.
In order to get down from 20 to 18, it is anticipated four clubs would be relegated directly, with two promoted from the Championship. In addition, there would be playoffs involving the team to finish 16th in the Premier League and those in third, fourth and fifth in the second tier.
It is also planned that, as well as the 'big six', ever-present league member Everton, West Ham United and Southampton – ninth and 11th respectively in the list of clubs which have featured in the most Premier League seasons – would be granted special status.
If six of those nine clubs vote in favor of a proposal, it would be enough to get it passed.
There is no mention of Aston Villa and Newcastle United, both of which have featured in more Premier League campaigns than Manchester City.