After year-long negotiations, the Tatas have terminated their near $2- billion investment deal with Malaysian state owned oil and gas company Petroliam Nasional Bhd (Petronas) in Tata Power NSE -8.21 %’s proposed renewable energy infrastructure investment trust NSE -3.03 % (InvIT), said multiple people aware of the development.

The decision to pull out at this advanced stage was conveyed last week after both sides were in the final stages of negotiating a binding term sheet.