Mr Mitnick, aged 35, was due to go on trial on 20 April on a number of charges of computer and telephone fraud. He had been awaiting trial since his arrest early in February 1995, when he was trapped in his endeavours by FBI agents in Raleigh, North Carolina.
As reported in The Independent on Sunday, his trial has been repeatedly delayed. But the latest deal could end the long wait. The terms are understood to include acceptance of a five-year sentence - though his period on remand will count towards that - and staying away from computers for at least three years.
Donald Randolph, his attorney, confirmed that a deal had been struck but said it had still to be reviewed by a district judge. "We are cautiously optimistic that the court will accept the agreement," he said.
Mr Mitnick was caught after an alleged criminal hacking spree. He was accused of stealing the details of 120,000 credit cards from an Internet company and copying $80 million (pounds 47m) worth of software from companies including Motorola, Sun Microsystems, Nokia and Fujitsu. Under US sentencing guidelines, he faced more than 35 years in jail if he had denied the charges and then been found guilty on all of them.
However, only 4 per cent of cases involving federal crimes actually come to trial, and supporters of Mr Mitnick said last week that he had been manipulated as his trial date had approached. Mr Mitnick was caught in 1995 after trying to break into the home computer of Tsutomu Shimomura, a specialist in supercomputers, living in San Diego, California - who, instead, helped the FBI break into Mr Mitnick's lair.
The imprisonment without trial of Mr Mitnick prompted a campaign by many hackers, who set up a web site dedicated to trying to get him freed. Last year, supporters hacked in to a New York Times web page to post pro-Mitnick statements and also criticise the paper's reporter John Markoff, who had chronicled Shimomura's online methods and Mitnick's arrest in the book TakeDown.