A lawyer for Ward Churchill, a faculty member in the school's ethnic studies department, said a sufficiently generous offer might interest his client, the Denver Post reported Saturday.
Churchill has long used his classes and published writings to accuse U.S. officials of race-based genocide, particularly among Indians.
Recent news of his comparing the victims of the World Trade Center attack to Nazis sparked talk of dismissing him, a process that could take years of litigation, something an early retirement deal could avoid.
Internal administration talks on such an offer have arisen just a week before a three-person panel is set to deliver a report on Churchill's fitness for tenure.
Meanwhile, fresh questions about his alleged Indian ancestry and potential cases of plagiarism are keeping him in the news.