Mr Flynn is moving to cooperate with a special prosecutor probing possible collusion between Donald Trump's campaign team and Russia during last year's election, The New York Times reported.
Lawyers for Michael Flynn notified the president's legal team in recent days that they could no longer discuss the investigation by special prosecutor Robert Mueller, the Times reported, citing four people involved in the case.
The development indicates that Flynn is cooperating with prosecutors or is negotiating such a deal, the report said.
Flynn's lawyers had been sharing information with Trump's legal team about Mueller's probe related to Russian interference in last year's presidential vote, which saw Trump defeat his Democratic challenger Hillary Clinton.
"That agreement has been terminated," the Times' sources said.
Mueller has a broad mandate and has honed in on the activities of Flynn, one of the highest-profile figures to come under his scrutiny.
In this Monday, Feb. 6, 2017, file photo, President Donald Trump passes Joint Chiefs Chairman Gen. Joseph Dunford, left, and Michael Flynn (AAP) Source: AAP
Three arrests
Flynn, a retired lieutenant general who previously led the Defense Intelligence Agency, became the White House national security advisor after Trump took office on January 20 this year.
He was forced to resign three weeks later amid reports about his communications with then Russian ambassador Sergey Kislyak and claims he had misled Vice President Mike Pence about them.
Mueller's investigation has already led to the arrest of Trump's one-time campaign chairman Paul Manafort, Manafort's partner Rick Gates, and George Papadopoulos, a campaign foreign policy advisor.
Papadopoulos pleaded guilty to lying to the FBI about his Russian contacts, in a deal that made clear he is cooperating with Mueller.
In addition to his frequent contacts with Kislyak, Flynn is alleged to have accepted payments before and after the election to lobby for Turkey.
US media have previously reported that Flynn and his son Mike Flynn Jr, who has worked with him, could be Mueller's next targets.
Three congressional committees have also been probing Russian meddling in US politics.
Although nothing has linked the president directly to the Russians, US media have reported that his firing of FBI director James Comey has drawn Mueller's attention.
Trump fired Comey in May, citing the FBI chief's probe into the alleged links between the presidential campaign and Russian interference, as well as Comey's alleged protection of Clinton.
Comey, for his part, wrote a memo alleging Trump had asked him to drop his investigation into Flynn.
On a trip to Asia this month Trump lashed out at three former US officials, including Comey, whose agencies helped produce the original intelligence finding of Russian interference.
He called former CIA chief John Brennan, former director of national intelligence James Clapper and Comey "political hacks."
Trump later qualified his remarks by saying he believed in his country's intelligence agencies, but also expressed faith in Russian President Vladimir Putin's denials of meddling in the US vote.
In mid-November US Attorney General Jeff Sessions denied to the House Judiciary Committee that he lied in previous testimony when he said he had no knowledge of contacts between Trump's campaign and Moscow.
Citing a poor memory, Sessions, whose recusal from the Russia probe led to Mueller's appointment, said he had forgotten a March 2016 meeting between Trump and his foreign policy advisory team despite leading the team.
One of the advisors was Papadopoulos, who admitted to investigators that he had multiple contacts with Russians and that his contacts were discussed in the meeting.
