As part of the plea deal, Hubbell, a former law partner in Arkansas of Hillary Rodham Clinton and a confidant and golf buddy of President Clinton, will get no jail time, the sources said.

Under the deal, Hubbell, a former top Justice Department official, will admit his guilt to one felony count of lying involving a failed development in Arkansas and one misdemeanor count involving tax evasion, the sources said.

The plea deal ended the possibility that Mrs. Clinton, who is considering running for the U.S. Senate in New York, would be called as a witness at Hubbell's trial, which had been scheduled to start in August.

The plea deal also resolved Starr's only remaining cases, bringing him closer to ending his nearly five-year and $40 million investigation.

Under the law he is required to submit a final report about his investigation. Sources close to Starr said he would like to leave as independent counsel later this year. The law under which he was appointed expires Wednesday, but his investigation can continue even after the law lapses.

Starr's investigation began into the involvement of the Clintons in the failed Whitewater land deal in Arkansas when he was governor and she was a lawyer in Little Rock.

Starr expanded his investigation in 1998 to Clinton's relationship with former White House intern Monica Lewinsky, an investigation that led to the historic Senate impeachment trial and acquittal of the president earlier this year.

The sources said they did not expect Hubbell, a key figure in the Whitewater investigation who has already pleaded guilty in an earlier case to stealing nearly $400,000 from the Rose Law Firm, to cooperate with Starr's investigation.

Hubbell had been scheduled to go on trial starting Aug. 9 on a 15-count indictment that charged he lied to conceal the work he and Mrs. Clinton performed on the failed Arkansas land development called Castle Grande.

Hubbell, his wife and two business associates also faced a separate tax-evasion case brought by Starr.

The sources said the two cases will be dropped now that the plea deal has been reached. They said the plea deal most likely will be entered before U.S. District Judge James Robertson, who has presided over the two cases, by the end of the week.

Hubbell and his attorneys have denounced Starr's office for bringing the two cases against him after he served 18 months in prison for stealing from his former law firm.

Hubbell has accused Starr of trying to put pressure on him to testify against the Clintons. He said he knows of no wrongdoing by the couple and would not lie about them.