Noureddine Mezni, a spokesman for the AU, said that Minni Arcua Minnawi, the leader of the Sudan Liberation Army (SLA) leader was ready to endorse the agreement.
"It's done. Minni is going to sign. He has accepted with some reservations ... but he is going to sign," Mezni said.
In a transcript of Friday morning's talks provided to Reuters by the AU, which has a peacekeeping force in Darfur, Minnawi is quoted as saying: "I accept the document with some reservations concerning the power-sharing."
Three Darfur rebel factions have been holding meetings in the Nigerian capital, Abuja, with AU and international mediators to try to reach a peace agreement after two years of stop-start negotiations to end three years of conflict in Sudan.
The main rebel group, the SLA, is split into two factions but observers say Minnawi has more support among SLA fighters than his counterpart, Abd al-Wahid Muhammad al-Nur.
Nur's SLA faction and the third rebel faction, Justice and Equality Movement (JEM), have rejected the peace settlement drafted by AU and Western diplomats.
The Sudanese government had already accepted a peace agreement drafted by the AU, but since then US-led diplomats have amended that draft to try to win support from the rebels.
An AU mediator said on Friday that the Sudanese government had also accepted the amended version of the agreement.
AU officials said the government delegation would now assemble at the compound of Olusegun Obasanjo, the Nigerian president, in Abuja to meet African heads of state, AU mediators and Robert Zoellick, the US deputy secretary of state.
There was no immediate word on whether JEM and the other SLA faction would be brought back into the discussions.