Prosecutors plan to begin calling witnesses again on Thursday against the men who are charged with the bombing.
They are also charged with the attempted bombing of another Air India flight which killed two Tokyo airport workers.
The bombing of Flight 182 which killed all 329 on board was the deadliest act of aviation sabotage before the September 11 attacks.
The murder trial of Ripudaman Singh Malik and Ajaib Singh Bagri was put on hold in September after a judge refused to give Malik, a wealthy Vancouver businessman, continued government financial aid for his defence.
In Vancouver, Malik's attorney on Tuesday said final details of an agreement between Malik and the provincial government were still being worked out, but lawyers were confident it would be resolved, allowing a resumption of trial testimony.
The men are accused of being part of a Canadian-based conspiracy that was fighting for an independent Sikh homeland in India and wanted revenge for the Indian Army's bloody 1984 storming of the Golden Temple, the Sikhs’ most sacred shrine.
Malik and Bagri, a Kamloops British Columbia sawmill worker, have both pleaded not guilty. They are being tried jointly, but are represented by separate defence teams.
On 23 June 1985, the Air India flight from Montreal to London, carrying luggage loaded in Vancouver, exploded and crashed into the Atlantic Ocean 240 km off the coast of Ireland.
Fifty-four minutes earlier, a suitcase loaded in Vancouver onto Canadian Airlines Flight 003 exploded in the airport at Narita, Japan. The suitcase was being transferred to Air India Flight 301 to Bangkok and Delhi. Two baggage handlers were killed and four other persons injured.
The Royal Canadian Mounted Police investigated these incidents for 17 years in conjunction with various police agencies in Europe, India, North America and Asia.
Malik and Bagri were arrested on 27 October 2000.