The agreement reached by the department and Skilling would include Skilling forfeiting his rights to further appeals of his 2006 conviction on various counts of fraud, conspiracy and insider trading that prosecutors said contributed to Enron's collapse.
When the energy company went belly up in 2001, it was the largest bankruptcy case in U.S. history.
Skilling, who was the company's president and chief executive officer, has spent six years in prison and has continued to maintain his innocence.
His first sentence of 24 years was already ruled too harsh, the result of a U.S. Supreme Court ruling on a federal "honest services" law that applied to Skilling's case.
The ruling judged the "honest services" law was too broad, which meant part of Skilling's conviction was retracted.
The sentencing agreement filed in a Houston court by the Justice Department has to be approved by the original judge in the case.
A re-sentencing hearing has been scheduled for June 21, the Journal said.
It allows for a range of sentencing from 168 to 210 months and for a reduction of 15 percent for good behavior.
Part of the terms for the deal include freeing up $40 million forfeited by Skilling that would go to victims in the case, the Journal said.
"The proposed agreement brings certainty and finality to a long painful process," said Daniel Petrocelli, one of Skilling's attorneys.
Even with the sentence reduction, Skilling would still be spending more than twice the amount of time in jail as anyone else conflicted in the case, "all of whom have long been out of prison," he said.