The organisation's so-called summit follow-up committee met in Cairo on Wednesday to discuss the reforms, in advance of an extraordinary foreign ministers meeting to finalise proposals on Thursday.
Removing one of the main sticking points, Algeria took a proposal off the table that would see the job of secretary-general rotate among members, rather than the job always being held by an Egyptian, as is currently the case.
"We agreed that the text of the charter (of the Arab League) is sufficient, provided that the secretary-general is elected by member countries following a political consensus on the candidate," Algerian Foreign Minister Abd al-Aziz Bilkhadim said.
Following talks with Bilkhadim, league Secretary-General Amr Musa said "the dossier on the rotation of the post of general secretary is closed and will not be reopened".
The follow-up committee is tasked with supervising the implementation of proposals to reform the league, which are due to be presented to a league summit later this year in Algiers.
Libya-Saudi friction has cast a
shadow over the Cairo summit
Foreign ministers from the 22-member, Cairo-based body are due to meet on Thursday to discuss the proposals, although four countries will be represented by their permanent delegates rather than at ministerial level, a league statement said.
Foreign ministers from Kuwait, Lebanon, Syria and the United Arab Emirates will not be present at Thursday's meeting, though no reason was given.
In addition, Saudi Foreign Minister Prince Saud al-Faisal will not be attending, Arab diplomatic sources said, reportedly because he does not wish to meet Libyan Foreign Minister Abd al-Rahman Shalgham amid a continuing diplomatic spat between the two countries.
Riyadh in December recalled its ambassador to Libya over Tripoli's alleged role in a plot to assassinate Crown Prince Abd Allah bin Abd al-Aziz.
Among proposed reforms are the creation of an Arab parliament, a court of justice and a security council. League reforms are due to be put to a summit in Algiers on 22 March.