A sign of ZTE Corp is pictured at its service centre in Hangzhou, Zhejiang province, China May 14, 2018.
The deal will force ZTE to pay an additional $1 billion fine and place $400 million in escrow in the event the company violates sanctions again.
USA companies could soon be cleared to do business with China's ZTE, according to Reuters.
ZTE would still have to pay the USA government up to $1.7 billion in fines as part of this new settlement, according to the report. However, a Commerce Department spokesman said that "no definitive agreement has been signed by both parties".
The Commerce Department denial order prevented ZTE from utilizing key technology from United States suppliers like Qualcomm and and Broadcom, making it hard to produce smartphones or telecommunications equipment. The resolution of the ZTE case may clear the way for the U.S.to make progress in its high-stakes trade talks with China.
Mr Ross emphasised that the agreement was separate from trade negotiations between the USA and China.
The company will also be required to change its board of directors and executive team within 30 days. The preliminary agreement was signed by ZTE over the weekend, but the Chinese company has yet to sign the amended settlement agreement.
Wikimedia Commons President Donald Trump announced plans to lift the seven-year sales ban that crippled ZTE, forcing it to cease major operations earlier this month. "Congress should move in a bipartisan fashion to block this deal right away".
Those measures had threatened to put ZTE out of business. It has a small but rising share of the smartphone business in the US. A fine was imposed on ZTE and the company promised to reprimand the employees responsible for the violations, yet they only fired 4 senior employees and failed to discipline the other 35 responsible.
Also as part of the deal, the company must allow audits of their sites so that it can be seen USA components are being used as claimed.