Reza Zarrab, the Turkish gold trader whose prosecution in New York has strained relations between the U.S. and Turkey, has pleaded guilty and will serve as a cooperating witness for the U.S. government, lawyers said Tuesday.

The disclosure came just before opening statements in the Manhattan federal trial of Mehmet Hakan Atilla, a Turkish banker accused of conspiring with Mr. Zarrab and seven others to help Iranian businesses illegally process billions of dollars in transactions, in violation of U.S. sanctions. Mr. Atilla...