Germany's largest carmaker Volkswagen AG was in "advanced discussions" with major shareholder Porsche SE over an initial public offering (IPO) of sports car maker Porsche, the company said on Tuesday.

Volkswagen and Porsche SE negotiated a "Framework Agreement which should form the basis for further steps in the preparation of a possible IPO," the carmaker noted.

The conclusion of the Framework Agreement is subject to the approval of the Management Board and the Supervisory Board of Volkswagen AG. A final decision has not yet been taken, said the carmaker in a release.

Rumors about a potential Porsche IPO, to be one of Germany's biggest listings in years, were getting louder around one year ago, causing shares of Volkswagen to skyrocket in the weeks to follow.

Shares of Volkswagen peaked at around 245 euros (276 U.S. dollars) in mid-April 2021 and are currently trading at around 190 euros.

Following the announcement, shares of Volkswagen and Porsche SE rose by around nine and 14 percent, respectively, making the German carmaker and its major shareholder the biggest winners at daytime trading on Tuesday. (1 euro=1.13 U.S. dollars)