A superseding criminal information was filed against Manafort in Washington ahead of a scheduled court appearance later Friday morning.
In August, Manafort was found guilty on eight out of 18 counts of financial crimes in his first trial in Virginia.
The new court filing indicates that prosecutors have taken a number of the earlier charges against Manafort, including a money laundering charge that could, on its own, bring a 20-year sentence, and folded them into two charges that would each yield five-year sentences. Trump has not said whether he would pardon Manafort, but the president has not publicly ruled it out.
However, the deal could involve Manafort's cooperation with Mr Mueller's investigation into possible collusion between the Trump campaign and Russian Federation.
If Manafort were to cooperate with Mueller, that could provide investigators new evidence or leads to chase; a guilty plea, however, would prevent weeks worth of headlines about the trial in the month before congressional elections.
So far, Manafort has refused to turn on his former boss - unlike other Trump administration figures - and there has been speculation that he is waiting on a pardon from the president at some later date. Manafort would be the fifth Trump aide to plead guilty in connection to the special counsel's probe.
Paul Manafort arrived for a hearing at District Court in Washington, D.C. He will not go on trial after all after having reached a plea agreement with the Justice Department.
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Paul Manafort, President Donald Trump's former campaign chairman.
Former Trump campaign manager Paul Manafort stands in a court room sketch, on the opening day of his trial on charges stemming from Special Counsel Robert Mueller's investigation in Alexandria, Va., on July 31, 2018.
Moscow has denied interfering in the 2016 election and Trump has said there was no collusion.
Another approach for Manafort would be to plead guilty without cooperating and perhaps later receive a presidential pardon.
The charges in the information say that Manafort will have to forfeit property that was derived from or traceable to his offenses. "In order to hide Ukraine payments from United States authorities, from approximately 2006 through at least 2016, MANAFORT, with the assistance of Gates and Kilimnik, laundered the money through scores of United States and foreign corporations, partnerships, and bank accounts".
On Twitter on August 22, Trump wrote: "Unlike Michael Cohen, he refused to "break" - make up stories in order to get a 'deal".