Hitachi estimates that 100 more nuclear power plants will be built in the next 20 years, and is seeking to use the joint venture to capitalise on the demand.
Hitachi said in a statement on Monday: "We aim to grow in the global nuclear power market, such as in advanced boiling-water reactors, by generating synergies with our expertise and experience."
The Japanese venture will be 80 per cent-owned by Hitachi and 20 per cent by GE, while GE will own 60 per cent of the US venture with Hitachi taking the rest.
The two companies will discuss details of the alliance and will sign a final contract in the first half of 2007.
Meanwhile, Hitachi has completed a $4.2 billion deal for Westinghouse, a nuclear power plant in the US.
Recently France's Areva, the world's largest maker of nuclear reactors, and Japan's Mitsubishi Heavy Industries said they would co-operate in the sector.