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Huawei chief financial officer Meng Wanzhou returns to British Columbia Supreme Court on Aug. 18, 2021, in Vancouver, during her last extradition hearing.DON MACKINNON/AFP/Getty Images

The United States has resumed discussions with Huawei Technologies Co. Ltd. and lawyers for Meng Wanzhou about a possible deferred prosecution agreement for the Chinese executive that could allow her to return to China, according to Canadian sources.

The development could open the door for China to free Canadians Michael Kovrig and Michael Spavor. Canada has accused Beijing of holding them hostage in retaliation for the arrest of Ms. Meng, who is detained in Vancouver and fighting extradition to the United States.

Two sources told The Globe and Mail the U.S. Department of Justice has been in talks for weeks with Huawei and lawyers for Ms. Meng, daughter of Ren Zhengfei, founder of the Chinese telecommunications giant. Those talks do not involve the fate of the two Canadians jailed in China.

Ms. Meng was detained at Vancouver International Airport in December, 2018, on a U.S. Justice Department extradition request for alleged bank fraud related to violations of U.S. sanctions against Iran.

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The U.S. is prepared to end the extradition request and criminal proceedings against Ms. Meng if she pleads guilty and pays a hefty fine, the sources said. Huawei accepting corporate responsibility for violating sanctions is not part of the discussions, the sources said.

The Globe is not identifying the sources because they were not authorized to publicly discuss the sensitive and confidential negotiations.

In late 2020, the U.S. Justice Department also held discussions with Huawei on a plea agreement.

Reid Weingarten, the lead U.S. lawyer for Ms. Meng, could not immediately be reached for comment on Friday.

The U.S. Department of Justice would not comment. “The United States continues to pursue the extradition of Ms. Meng. We decline to comment further,” Nicole Navas Oxman, a spokesperson for the U.S. Department of Justice, said in an e-mailed statement.

The Department of Justice has the power to withdraw the extradition request and the arrest warrant for Ms. Meng.

Sources said the talks hinge on Ms. Meng’s willingness to accept a plea deal, which she rejected in December, 2020, when the U.S. Justice Department first held discussions about a deferred prosecution agreement.

The sources said the current negotiations do not involve a quid pro quo for the release of Mr. Spavor and Mr. Kovrig, who were arrested in China on espionage charges shortly after Ms. Meng was detained. They have been held in Chinese prisons while Ms. Meng is out on bail and living in a $13.7-million Vancouver home while she contests her extradition.

Any discussions about the release of the two Michaels would involve the Chinese government, which has demanded that Ms. Meng be allowed to return home, the sources said. Even if Ms. Meng were allowed to leave Canada as part of a U.S. settlement, the sources said it is unlikely the two Michaels would be immediately freed.

In June, The Globe reported that Canada’s ambassador to China, Dominic Barton, spent three weeks in Washington in early April holding talks with senior officials in the Biden administration aimed at facilitating the release of two Canadians.

Mr. Barton met with officials from the White House National Security Council and the departments of Justice, State, Defense, Treasury and Commerce. He also held talks with Cui Tiankai, China’s ambassador to the United States.

China put Mr. Kovrig and Mr. Spavor on trial in March. They were charged with spying as part of a process that Canada and dozens of allies call arbitrary detention on bogus charges in a closed system of justice with no accountability. A Chinese court in August found Mr. Spavor guilty of espionage and sentenced him to 11 years in prison. He has appealed the ruling. The verdict for Mr. Kovrig has yet to be announced.

The two men are not allowed visits from family or lawyers. Canadian diplomats see them about once a month in a video link.

Huawei, which is based in Shenzhen, China, has made freeing Ms. Meng one of its priorities.

Alykhan Velshi, the vice-president of corporate affairs for Huawei Canada, who was hired shortly after Ms. Meng was arrested, has spent the past few years trying to build support around the world for the arrested tech executive, including conducting background briefings with lawyers and media in Europe, Asia and North America.

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