The government in October prohibited the marketing and sale of the model over the US tech titan's failure to meet regulations requiring 40 percent of phones be made from local parts.

Industry Minister Agus Gumiwang Kartasasmita said Wednesday that a Memorandum of Understanding had been signed virtually between officials from his ministry and Apple, reports said.

Apple will build two facilities -- one in Bandung in West Java Province to produce accessories and another in Batam worth $150 million to help produce Airtags via local suppliers, Bloomberg News reported the minister as saying.

The MoU allows for the revoking of the iPhone 16 sales ban under certain conditions, according to the reports.

Agus said work towards approval of a local content certificate to sell the iPhone 16 could begin after the agreement was signed, local news site Kompas said.

A government source confirmed to AFP on Tuesday that terms for the lifting of the ban had been agreed, without providing more details.

Apple Indonesia, the Industry Ministry and the Investment Ministry did not immediately respond to a request for comment.

Jakarta rejected a $100 million investment proposal from Apple in November, saying it lacked the "fairness" required by the government.

The negotiation deadlock forced Apple to later offer an investment of $1 billion to build an AirTag factory in the country.

Despite the sales ban, the government had allowed iPhone 16s to be carried into Indonesia if they were not being traded commercially.

Indonesia also banned the sale of Google Pixel phones for failing to meet the 40 percent parts requirement.

Apple chief executive Tim Cook visited Indonesia last year as the tech giant explored ways to invest in the country and diversify supply chains away from China.

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