BP is set to receive a record fine of between $3 billion and $5 billion to settle criminal charges related to the 2010 Deepwater Horizon disaster.
It will be the biggest criminal penalty in US history.
The settlement with the Department of Justice involves BP pleading guilty to criminal charges.
It is thought that up to four BP staff will be arrested.
Details of the settlement are expected to be confirmed by the Washington-based Department of Justice later.
Earlier, BP said it was in “advanced discussions” with US agencies about settling criminal and other claims.
BP is set to receive a record fine of between $3 billion and $5 billion to settle criminal charges related to the 2010 Deepwater Horizon disaster
BP said that any deal would not include a range of other claims including individual and federal claims for damages under the Clean Water Act, and state claims for economic loss.
The 2010 Deepwater Horizon disaster killed 11 workers and released millions of barrels of crude into the Gulf of Mexico over 87 days.
The settlement is much bigger than the largest previous corporate criminal penalty assessed by the Department of Justice, the $1.2 billion fine imposed on drug maker Pfizer in 2009.
The oil giant has been selling assets worth billions of pounds to raise money to settle all claims. The company is expected to make a final payment of $860 million into the $20 billion Gulf of Mexico compensation fund by the end of the year.
BP has booked provisions of $38.1 billion to cover its liabilities from the incident, but the company has said the final cost remained highly uncertain.
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BP has reached a $7.8 billion deal with the largest group of plaintiffs suing the company over the 2010 Deepwater Horizon oil rig spill.
It will benefit some 100,000 fishermen, local residents and clean-up workers whose livelihoods or health suffered.
BP has not admitted liability and still faces claims from the US and state governments, and drilling firms.
The rig exploded in the Gulf of Mexico in April 2010, killing 11 workers and leaking four million barrels of oil.
BP says it expects the money to come from a $20 billion compensation fund it had previously set aside.
“From the beginning, BP stepped up to meet our obligations to the communities in the Gulf Coast region, and we’ve worked hard to deliver on that commitment for nearly two years,” BP Chief Executive Bob Dudley said.
“The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.”
BP’s Deepwater Horizon rig exploded in the Gulf of Mexico in April 2010, killing 11 workers and leaking four million barrels of oil
Lawyers for the plaintiffs’ group, the Plaintiffs’ Steering Committee, said the settlement “does the greatest amount of good for the greatest number of people”.
A trial in the case, due to begin on Monday, will now be delayed – for a second time – as a result of the deal, Judge Carl Barbier said.
The settlement will “likely result in a realignment of the parties,” he said.
The trial is now being adjourned “in order to allow the parties to reassess their respective positions,” Judge Barbier said.
The trial was due to resolve claims for damages and civil penalties arising from the spill.
Judge Barbier is an expert in maritime law and has consolidated hundreds of spill-related lawsuits into a single case.
The trial will probably still go ahead in order to apportion blame for the spill among BP and its fellow defendants.
Other companies involved include Transocean, who owned the rig, and Halliburton. All the companies are in dispute with each other over their liability to each other.
BP has so far paid out $7.5 billion in clean-up costs and compensation.
US President Barack Obama called the spill “the worst environmental disaster the nation has ever faced”.
It took 85 days to permanently stop the release of crude oil.
