Sources say the preliminary deal includes a $1 billion fine against the Chinese company and an additional $400 million in escrow in the event of future violations.
In April, the U.S. Commerce Department banned ZTE from buying parts from American suppliers after the company was found to have falsely informed the U.S. government that it had disciplined employees responsible for violations that led to a settlement previous year.
The decision amounted to a death sentence to ZTE, which relies on USA parts and which announced that it was halting operations.
Under the deal, ZTE must retain a compliance team selected by the Commerce Department for 10 years. It was blocked from purchasing parts from USA companies, sanctions that had crippled the company.
In return the US Commerce Department would lift its sanctions that prevent ZTE buying from US suppliers.
ZTE, which sources up to 30 per cent of its components from the United States, paused its operations as a result and claimed its survival was at risk.
Noting that the deal imposed the strictest compliance ever on any company, American or foreign, Ross added: "We are literally embedding a compliance department of our choosing into the company".
ZTE has promised to replace its board and executive team as part of the deal.
Washington and Beijing have threatened each other with massive new tariffs on up to $150 billion of exports from the two countries, the fallout from the US demand that China buy more American goods to sharply cut last year's $375 billion Chinese trade surplus with the U.S. "This should serve as a very good deterrent not only for them but for other potential bad actors", Ross said. The president expressed a desire to get the Chinese firm "back into business" and today that is a step closer to happening.
ZTE did not immediately respond to requests for comment.
After much negotiation with the Trump Administration, Secretary of Commerce Wilbur Ross confirmed this morning that ZTE, the Chinese telecommunications giant, has agreed to a $1 billion fine.