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Billy Bishop Toronto City Airport in Toronto on August 29, 2014.

Michelle Siu/The Globe and Mail

Porter Aviation Holdings Inc., the biggest operator of flights at Toronto's island airport, is nearing a deal to sell its passenger terminal to a group led by InstarAGF Asset Management Inc. for more than $750-million, people with knowledge of the matter said.

An agreement on the sale of the facility at Billy Bishop Airport, located on an island in Lake Ontario close to Toronto's financial district, could be reached as soon as this month, said the people, who asked not to be identified discussing private information. No agreement has been reached and talks may still fall through.

Porter Aviation is the parent company of Porter Airlines Inc. and City Centre Terminal Corp., which operates the terminal. The company said in August it was exploring a sale- leaseback of the terminal in order to focus on its airline business. It plans to use proceeds to fund expansion of the airline, which operates to 19 destinations in eastern Canada and the U.S. using a fleet of Bombardier Q400 turboprops.

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InstarAGF, a joint venture between AGF Management Ltd. and Instar Group Inc., was created a year ago to target investments including infrastructure. Toronto-based AGF has more than C$35 billion in assets under management and InstarAGF and Instar Group are run by Gregory Smith, a former executive at Brookfield Financial and Macquarie Capital Funds Canada Ltd.

"We can't offer any specific response to speculation about bidders or pricing at this stage," Brad Cicero, a spokesman for Porter, said in an e-mail. "We are hopeful that a deal is concluded by the end of the first quarter, but the process is ongoing."

Sarah Borg-Olivier, a spokeswoman for InstarAGF, declined to comment.

Porter Aviation built the facility at the airport prior to the start of its short-haul carrier in 2006, and has operated it since. Porter Airlines will continue to be based at Billy Bishop with no change to its operations, according to the August statement.

Air Canada, which also operates flights from the Toronto island airport, said this week it is considering whether to keep flying at the facility and is "assessing the viability of Billy Bishop operations based on current imposed terminal rates."

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