eBay plans to shutter its main auction site serving China and replace it with one majority owned and run by a Chinese company, according to a report in the Wall Street Journal.

As soon as Tuesday, the San Jose-based online auction company will announce that it has formed a partnership with Tom Online, a Beijing-based online portal company, according to the Journal. Tom will invest $20 million and own a 51 percent stake in the joint venture, which will head up eBay's new Chinese auction effort. eBay will invest $40 million and own the remaining 49 percent of the company, the Journal reported.

The new site will launch next year, but the companies have not yet decided what to call it, according to the Journal. eBay will continue to run an auction site catering to Chinese who sell items to buyers outside of the country.

Wang Lei Lei, Tom's CEO, will head the new partnership, while Jeff Liao, head of eBay China, will have a management role and continue to head the cross-border site.

eBay has seen slowing growth of late and has been counting on international expansion to boost its results. But the withdrawal from China would represent the company's second big setback in Asia. The company has been absent from the Japanese market since closing its site there in 2002.