Guillaume Denoix de Saint Marc said on Thursday he expected a formal signing ceremony with Libyan officials to take place in Paris on Friday, adding the essential details have been settled.
Denoix, who lost his father in the mid-air bombing over the west African state of Niger that France has blamed on six Libyans, declined to give the figure of the settlement.
Earlier, a spokeswoman for the head of the upper house of the French parliament said the visiting Libyan foreign minister had confirmed the pay-out would total $170 million on top of an earlier $34 million settlement.
The money is expected to be distributed among families of victims of 17 nationalities, including Africans, Americans, Britons and Italians who were aboard the ill-fated plane.
The signing would be accompanied by a separate declaration by France and Libya on strengthening bilateral ties, said a French official.
Libyan Foreign Minister Muhammad Abd al-Rahman Chalgam is due to meet his French counterpart Dominique de Villepin on Friday for talks and a joint news conference. The foreign ministry gave no details of what they would discuss.
Libya Foreign Minister Chalgam
will meet his French counterpart
France has insisted the UTA settlement must be part of any reconciliation between Libya and the West. Tripoli pledged last month to scrap its banned arms programmes and last year agreed compensation for the 270 victims of the 1988 Lockerbie bombing.
Paris threatened last year to veto the lifting of UN sanctions on Libya after Tripoli agreed to pay $2.7 billion compensation for the bombing over Lockerbie, Scotland, a deal that dwarfed the initial $34 million UTA settlement.
Paris relented after Libya said it would increase compensation for the French airliner bombing, for which six Libyans were convicted in absentia by a French court.
Subsequent negotiations with a private fund run by Libyan leader Muammar al-Qadhafi's son have proved stickier than expected, with Libyan officials unveiling conditions for the payout.
Those conditions include the creation of a so-called Franco-Libyan "friendship pact" and agreement on the fate of the six Libyans convicted in absentia, who Tripoli says are innocent.