Two US soldiers and a Turkish woman were killed and more than 200 people were injured in the Berlin bombing which led to a US bombing campaign against Libyan cities.
The Al-Qadhafi International Foundation for Charity Associations said on Thursday it is hoping to meet victims and their families to reach a quick and simple solution.
"However, this humanitarian initiative is not recognition or acceptance of responsibility for this act from any side whatsoever," said the charity, which is led by al-Qadhafi's son Saif al-Islam.
German news magazine Der Spiegel reported earlier this month that Libya had told the German government it was ready to make payments to non-American victims of the bombing.
However, the foundation declined to give details of who would receive compensation.
A Berlin court ruled in 2001 that the Libyan secret service was behind the attack, which occurred a month after the US sank two Libyan patrol boats in the Gulf of Sirte.
A group campaigning for compensation said it welcomed the charity's statement.
Lawyers representing non-American victims said they were seeking 500,000 euros for each injured person.
Two hundred and seventy people
died in the Lockerbie bombing
The move came after Libya accepted responsibility "for the actions of its officials" in the bombing of an airliner over Lockerbie, Scotland, in 1988.
Last week it transferred $2.7 billion to the Bank for International Settlements to compensate the families of the 270 people who died when the plane was blown up.