Honda director, Mashashi Yamamoto, says his company are ready to provide Sauber with power units.
Sauber's former team boss Monisha Kaltenborn had been in talks with Honda about a potential partnership but reports had suggested a deal was off after the 46-year-old Indian left her role earlier in the year.
It was claimed there was only a verbal agreement between both parties and no official contract had been signed, meaning the Switzerland-based outfit could look elsewhere for a new engine provider.
However, talks appear to have progressed well over recent days and Yamamoto has responded positively when asked about the situation: "We are ready to equip Sauber with power units. I built up a lot with Monisha Kaltenborn and we would be happy to have Sauber.
"Honda has no objections to the originally agreed deal."
Honda's reputation in Formula One has taken a battering since their return in 2015 as an engine-provider to McLaren, with the numerous reliability issues and poor performances causing strains between both sides.
McLaren are currently rock-bottom of the team standings this season, having clinched just two points from nine grands prix.