The report was more cautious than the cable network's report on Wednesday that the bank could announce a deal as early as Thursday.
Citigroup is one of the last major banks that still must repay the government. The bank borrowed $45 billion under the Troubled Asset Relief Program last year, over the course of two rescues.
This year, the government agreed to convert $25 billion of those funds into Citigroup common stock, leaving the United States with a roughly 34 percent stake in the bank.
The bank fears that if it does not pay back the bailout money by year end, it will face pay restrictions for 2009 that will make it uncompetitive, and it will lose some of its most talented employees.
Sources briefed on the matter on Wednesday told Reuters the bank stands ready to launch a multibillion-dollar share offering when it gets the green light.
The bank's chairman, Dick Parsons, said on Wednesday on CNBC that Citigroup was in a position to repay the bailout funds and was in talks with regulators about it.
On Monday, Reuters reported that Citigroup and the government disagreed over how much the bank should raise to repay taxpayers, according to people briefed on the matter.
Bank of America Corp
That leaves Citigroup and Wells Fargo & Co
The other original TARP recipients, including Goldman Sachs Group Inc
Citigroup shares were up 2 cents to $3.88 in morning trade on the New York Stock Exchange.
ISSUES TO RESOLVE
CNBC quoted the Treasury official on Thursday as saying that in order for Citigroup to repay TARP, issues that must be resolved include how much new equity to issue, and how to resolve a guarantee on a pool of assets that the government provided to Citigroup. The bank also must allow the government to unwind its share position, the official said.
Citigroup executives, along with members of other 11 banks, will meet on Monday with U.S. President Barack Obama, who summoned the bankers to press them to increase lending to small businesses and discuss his administration's financial regulatory reform efforts.
Deutsche Bank analysts estimated that Citigroup's Tier 1 common capital ratio would end 2009 at about 9 percent before a capital raise, compared with 9.1 percent at the end of the third quarter and 7.5 percent for banks overall.
Analysts have said that doing a TARP deal will be difficult for Citigroup, in part because of the government's stake in the bank.
A Citigroup spokesman declined to comment. A Treasury spokesman also declined to comment.
(Reporting by Steve Eder and Juan Lagorio; additional reporting by David Lawder and Matt Spetalnick in Washington; editing by John Wallace)