A loan of $1.5 billion is also expected to be offered, along with an additional package of $3 billion for the China-Pakistan Economic Corridor (CPEC), the report said.
Xi appreciated Khan for repeatedly stressing that he would view the relations with China as a political cornerstone in Pakistan's foreign policy and would unswervingly promote the construction of the China-Pakistan Economic Corridor (CPEC).
He said with Pak-China trade balance now in favor of China, Pakistan wanted to get help from China for pushing the country's exports and address its one of the main problems of the current account deficit.
Xi said he attached "great importance to China-Pakistan relations" and was "willing to work together with the prime minister to strengthen China-Pakistan's all-weather strategic partnership and build a new era of China-Pakistan destiny".
"It is not targeted against any third party", he said, despite the project passing through PoK.
Xi assured Khan that China considers its relations with Pakistan a diplomatic priority.
During the meeting, PM Imran and AIIB president agreed to ensure transparency in the projects by accountability.
Pakistan is now hoping to secure help from the International Monetary Fund (IMF) to avert the crisis in what would be the nation's 13th rescue package from the lender in 30 years.
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While China asserted that the bus service from Lahore to Tashkurgan in Xinjiang - timed to begin when Pakistani Prime Minister Imran Khan will be visiting Beijing - did not alter the country's stance on the Kashmir issue, Pakistan dismissed India's objections as "frivolous".
In a meeting with Chinese IDCPC Minister Song Tao in Beijing, he said such exchanges would ensure that the exceptional friendship between Pakistan and China endured from generation to generation.
He said Pakistan faced a deficit of United States dollars 27 billion which included USD 9 billion debt repayment this year.
Imran will meet Chinese Premier Li Keqiang on Saturday when the two countries are expected to sign a series of agreements.
After visiting Beijing, Khan is set to be a key note speaker at a major import fair in Shanghai, an event being touted by China as an opportunity to show the world the country welcomes foreign companies and their products.
The minister said: "Cooperation in agriculture and security realm will be part of our discussion with the Chinese leadership". "But on the issue of Kashmir, China's position is clear cut".
Khan, who arrived in Beijing on Thursday evening for a five-day visit - his first to the city since his election victory in August - said before he left that he wanted to learn more from China, which is not only Pakistan's strategic partner but also its biggest foreign investor and aid donor.
According to a statement released by Khan's office in Islamabad, the prime minister said the belt and road initiative would translate into a win-win for shared prosperity in the region and beyond. The trip "is significant for President Xi Jinping, whose flagship BRI has had hiccups in recent months".