It comes after Icelandair pulled out of a takeover deal for its rival this week.
Indigo Partners is the private equity firm that maintains lead investments in Wizz Air Holdings, Frontier Airlines, Volaris Airlines and and JetSmart.
Terms of this new transaction have not been disclosed.
“Following successful completion of due diligence, the parties would work to close as soon as practicable,” a statement read.
Wow’s chief executive and primary shareholder, Skuli Mogensen, would remain a principal investor in Wow upon completion of the transaction.
"The demand for low-cost air service continues to expand rapidly worldwide, and with Indigo as a partner, we hope to take full advantage of this highly attractive market segment," said Mogensen.
"I am excited to work with Indigo and I am convinced it is the best long-term move for our people and passengers."
Bill Franke, managing partner of Indigo Partners, added: "Skuli and Wow’s management and employees have done a remarkable job in creating a well-regarded, successful ULCC brand.
"We have a strategic vision for the airline, and look forward to working with its employees and agents to deliver that vision."