Mr Belhaj claims MI6 helped the US kidnap him in Thailand in 2004 to return him and his wife to Libya, where he says he was tortured.
The attorney general will make a statement in Parliament on Thursday.
The settlement terms are unknown but Mr Belhaj, 52, has previously demanded an apology and a token £1 in damages.
A leading opponent of the then Libyan leader Colonel Muammar Gaddafi, Mr Belhaj says he was abducted in Bangkok – along with his pregnant wife, Fatima Boudchar – while attempting to fly to London to claim UK asylum.
Mr Belhaj claims MI6 provided key intelligence in 2004 on his movements which ultimately led to the capture and rendition of him and his wife by the US to Libya.
Rendition is the process of sending a suspect for interrogation in another country where torture may be practised.
Now a politician in Libya, Mr Belhaj spent six years in prison upon his return to the country and Moroccan-born Ms Boudchar was released shortly before giving birth.
Human rights charity Reprieve says Ms Boudchar and her son will be in Parliament for Thursday’s statement.
