The deal, which the companies have been negotiating on and off for months, would be AOL Time Warner's first major acquisition outside the US since its merger in January.
If the US company pulls off the deal it will go some way to meeting a self-imposed target that half of total revenues will be achieved outside the US.
IPC Media is majority owned by venture capital firm Cinven, which backed an £860m management buyout in 1998, giving the finance firm a 56% stake in the publisher. The firm's total investment in the company has since topped the £1bn mark.
Cinven said it would seek to dispose of its stake in IPC within three to five years either through a sale or an IPO. However, tough market condition have made the prospect of a flotation look unlikely.
The deal would bring Time's total number of magazines to 160 from 60, adding such titles as Woman's Weekly, Horse and Hound and Ideal Homes.
Time bought Times Mirror Magazines last December for $475m (£340m). More recently it acquired Business 2.0, the new economy title, from Future Network.
Cinven confirmed today that it and IPC Media are "in discussions with Time Inc about the possible sale of the company".
"There can be no assurance that a transaction will result and the parties do not intend to make any further announcement until the conclusion of these discussions," a statement from the company said.