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Erik D. Prince, the founder of the private security firm formerly known as Blackwater Worldwide, has reached a deal to sell his embattled firm to a small group of investors based in Los Angeles who have close ties to Mr. Prince, according to people briefed on the deal.

Blackwater, now called Xe Services, was once the United States’ go-to contractor in Iraq and Afghanistan. It has been under intense pressure since 2007, when Blackwater guards were accused of killing 17 civilians in Nisour Square in Baghdad. The company, its executives and personnel have faced civil lawsuits, criminal charges and Congressional investigations surrounding accusations of murder and bribery. In April, federal prosecutors announced weapons charges against five former senior Blackwater executives, including its former president.

The sale, which is expected to be announced on Friday, came after the State Department threatened to stop awarding contracts to the company as long as Mr. Prince owned the firm, people involved in the discussions said. These people requested anonymity because they were not authorized to speak about the confidential talks. The sale is intended to help shake the stigma associated with its ownership under Mr. Prince.

Yet questions remain about Mr. Prince’s continuing relationship with the company. While he is expected to step down from any management or operational role, he will have a financial interest in the company’s future, according to people briefed on the negotiations. As part of the deal, he will be paid an “earn out,” or a payment that depends on the company’s financial performance over the next several years, these people said.

One of the lead investors in the deal is Jason DeYonker of Forté Capital Advisors, who has a long relationship with Mr. Prince and Blackwater. He helped advise Mr. Prince in his development of Blackwater’s business plan when the company was founded and helped negotiate the company’s first training contracts with United States government agencies and the company’s expansion of its training center in Moyock, N.C. In addition, he managed the Prince family’s money from 1998 to 2002. The other lead investor is Manhattan Growth Partners, a private equity firm in New York.

Exact terms of the deal could not be learned, but people involved in the talks said the transaction was worth about $200 million. Bank of America led the financing of the transaction, these people said.

Mr. Prince, a former Navy Seal who created Blackwater in 1997, put his company up for sale in June and moved his family to Abu Dhabi, court records show. Mr. Prince, who built Blackwater using an inheritance from his family’s Michigan auto parts fortune, stepped aside as Xe’s chief executive in 2009 but has remained chairman until now. Mr. Prince sold the company’s aviation division, Presidential Airways, to the AAR Corporation in March.

The auction for Xe Services has dragged on for months as speculation has swirled about the company’s future and the auction process. Some bidders speculated that Mr. Prince had always favored selling the company to the investor group led by Mr. DeYonker.

The new buyers are hoping to recast the company as a military training organization instead of a private security service. The company’s training center in Moyock has trained more than 50,000 United States government personnel and allied forces. The buyers hope to receive new contracts to train forces in Iraq, Afghanistan and Yemen, among other locations, especially as the United States withdraws troops and needs to train local forces.

After the sale, the company will continue to be subject to an agreement it reached with the State Department in August. Under the settlement, the company paid $42 million in fines over hundreds of violations of United States export control regulations, permitting it to continue to compete for government contracts.

Wendy Wysong, a partner at the law firm Clifford Chance, was appointed as a special compliance officer for Xe Services as a result of the settlement.

James Risen contributed reporting.

