Under the deal, ZTE will change its board and management within 30 days, pay a $1 billion fine and put $400 million in escrow.
USA lawmakers on Thursday renewed vocal objections to lifting the sanctions, saying the company posed an "espionage risk" to the United States in addition to having violated its sanctions on Iran and North Korea.
The Commerce Department, which oversees sanctions enforcement, told Reuters on Tuesday that "no definitive agreement has been signed by both parties". The dispute stemmed from a USA decision to block sales of American-made components ZTE needs to manufacture its products for seven years, until 2025. The government will suspend the 10-year ban but it can activate the ban if there are any violations.
According to reports out of China, ZTE has been making plans to resume manufacturing within hours from the official lift of the USA embargo, which deprived it of crucial US -made components including SoCs, radio chips, and software.
ZTE did not immediately respond to requests for comment today. "ZTE has also been replacing some of its top executives in a bid to make good on its pledge".
However, Mr Ross stated that the ZTE agreement would not have any effect on the talks.
ZTE had agreed to dismiss four senior employees and discipline 35 others either by reducing their bonuses or reprimanding them, according to senior Commerce Department officials.
US Commerce Secretary Wilbur Ross defended the new agreement, saying in a statement: "We will closely monitor ZTE's behavior".
Although the company dismissed four senior officials for their part in the scandal and installed a compliance team and new procedures at a cost of more than $50 million, it did not discipline a further 35 staff involved - a failure which prompted the U.S. government's action.
"There is absolutely no good reason that ZTE should get a second chance and this decision marks a 180-degree turn away from the president's promise to be tough on China".
The terms, they said, were in line with Reuters reporting on the US demands Friday. Since then, the company appears to have signed a preliminary agreement that would see them pay a larger fine and then have the ban lifted.
The announcement boosted shares in United States component makers including Acacia Communications, Oclaro and Lumentum Holdings.
In an interview with CNBC, Ross expressed his satisfaction with the arrangement, which imposes a fine of one billion dollars to this giant of the sector and forces it to leave in trust 400 additional millions.