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The Walt Disney Co.’s music arm is reuniting with talent manager Bob Cavallo. Studio chief Joe Roth has engineered a joint-venture pact with Third Rail Records, the company of the vet music industry exec who is perhaps best known as a member of the team behind Prince during his most successful period.

Cavallo, a principal in Atlas Entertainment, will also act as consultant to the studio’s music operation, but is not being looked at as a potential exec to helm the operation.

He is expected to bring along music industry execs Scott Welch and Pat Magnarella, who have worked with Cavallo in Atlas’ music arm. Atlas was formed in 1994 by Dawn Steel and her husband, Chuck Roven.

The deal with Cavallo’s Third Rail, which had been in negotiations for months and is not yet concluded, is expected to be announced this week. Sources said the pact is expected to close in the next few days.

Third Rail Records previously had a pact with Disney label Hollywood Records that was inked with Cavallo by then-label chief Peter Paterno. It was one of several label pacts that had short life-spans during the exec’s tempestuous rein.

Cavallo was partnered with Steve Fargnoli and Joe Ruffalo in Cavallo, Ruffalo & Fargnoli, a potent management firm that repped Prince and produced the successful 1984 pic “Purple Rain” starring the singer.

Cavallo has long been interested in working with a company that produces films and manages talent, and intersects the two. He’s been working to get his management clients, including Seal and Alanis Morissette, in films.

Roth, who is overseeing the operation of the music arm in addition to his duties as Walt Disney Studios chairman, is also full-court pressing Trauma Records execs to join the fold.

The label, which split from its distributor Interscope Records several months ago as part of a bitter dispute and lawsuit over ownership of the band No Doubt, has been aggressively courted by several labels and congloms since the breakup.

Sources said BMG, A&M Records and Elektra Entertainment are also on the short list of homes being considered by Trauma principals.

Trauma’s pacting with Disney would also reunite Trauma chief Rob Kahane with the Mouse House. Kahane, too, had a short-lived joint-venture deal with the studio in 1993.