* Nissan to buy control of scandal-hit Mitsubishi
* Cost-killer Ghosn turned around Renault, Nissan
* Ghosn asked Mitsubishi chief Masuko to stay on -Nikkei (Updates sourcing, adds analyst and shareholder comments, details on Ghosn leadership)
By Maki Shiraki and Naomi Tajitsu
TOKYO, Oct 19 (Reuters) - Nissan Motor Co Ltd Chief Executive Carlos Ghosn will chair Mitsubishi Motors Corp after Japan's second-biggest automaker by sales buys control of its smaller peer, two people with knowledge of the matter told Reuters on Wednesday.
Ghosn, nicknamed "le cost killer", will oversee an automaker expecting an operating loss of 28 billion yen ($270.69 million) in the year to March. Behind the loss are provisions to cover any quality-related issues that arise while Mitsubishi recovers from a mileage-cheating scandal that sent its shares spiralling.
The two automakers have not decided who will be president of Mitsubishi, said one person with direct knowledge of the matter and another briefed on it. Both declined to be identified ahead of formal announcements.
Ghosn, who is also CEO of Nissan alliance partner Renault SA , has asked Mitsubishi Motors Chairman and President Osamu Masuko to remain president when Nissan takes over, said the Nikkei newspaper, which first reported Ghosn's appointment. Mitsubishi's shares rose as much as 10 percent after the report.
Spokespeople at Nissan and Mitsubishi declined to comment when contacted by Reuters.
Ghosn earned his nickname after ordering plant closures when restructuring Renault. He later steered Nissan to profitability.
"This is a man who patched up Renault in the 1990s, and he did a lot for Nissan in the 2000s, so I'm sure he looks at Mitsubishi Motors as a new challenge," said CLSA analyst Christopher Richter.
"He's a turnaround artist. This is what he does best," said Richter. Ghosn at the helm of Mitsubishi Motors' board would "remove an enormous burden from the Mitsubishi group companies," he said.
The appointment "should be good (for Mitsubishi Motors)," said Yasuhito Hirota, Executive Vice President at shareholder Mitsubishi Corp. "He is likely to be better than anybody else," he said, declining to elaborate.
Nissan in May said it would buy 34 percent of Mitsubishi Motors for around 237 billion yen after Mitsubishi admitted to falsifying the mileage of four minivehicle models, including two made for Nissan. In August, it was found to have overstated the mileage of eight more models.
Mitsubishi Motors blamed poor communication, lax governance and internal pressure.
Nissan is set to finalise its purchase by the end of 2016, after which the shareholding of Mitsubishi group companies - trading house Mitsubishi Corp, Mitsubishi Heavy Industries Ltd and Bank of Tokyo-Mitsubishi UFJ Ltd - will be diluted to 17 percent from around 34 percent before the deal was announced.
Nissan has said it will not sell its stake to a non-group company without Mitsubishi Motors' consent for 10 years.
Mitsubishi Motors will decide executive appointments after a December shareholder meeting, the Nikkei reported.
$1 = 103.4400 yen Reporting by Maki Shiraki Naomi Tajitsu; Additional reporting by Chang-Ran Kim, Taiga Uranaka and Osamu Tsukimori; Editing by Stephen Coates and Christopher Cushing