Australia is on the brink of signing a breakthrough deal with the United States on asylum seekers after months of protracted negotiations.

Key points: Under the deal the US will resettle detainees on Manus Island and Nauru found to be refugees

Under the deal the US will resettle detainees on Manus Island and Nauru found to be refugees 'Plenty of time' for deal to be struck before hardline Trump takes office, Pyne says

'Plenty of time' for deal to be struck before hardline Trump takes office, Pyne says Labor welcomes prospect of deal with US, asks for more details

Government ministers remained tight-lipped yesterday when The Australian newspaper reported the two countries were poised to announce the pact.

But several sources confirmed to the ABC that Australia and the US would sign an agreement which would resolve the fate of almost 1,300 asylum seekers on Manus Island and Nauru, some of whom have been facing years of uncertainty.

Under the deal, the US will resettle detainees who have been processed on the two island facilities and who have been found to be refugees.

An announcement is likely on Sunday.

At this stage it is not clear whether the immigration detention centres on Nauru and Manus Island will be closed after the deal is signed.

It is also unclear what will happen to detainees who have not been found to be owed protection.

According to the Department of Immigration, as of September 30 there were 396 people in Nauru and 873 on Manus Island.

Immigration Minister Peter Dutton has ruled out resettling any refugees in third countries until Parliament passes legislation preventing anyone who tried to reach Australia by boat after July 19, 2013 from ever being granted an Australian visa.

That legislation passed the lower house this week in the face of fierce opposition from Labor, but has not yet gone through the Senate, where it faces an uncertain fate.

'Plenty of time' for deal to be struck before Trump takes office

The US presidential election has also injected uncertainty into negotiations.

President-elect Donald Trump has taken a hardline stance against illegal immigration, and has previously threatened to stop Muslims from migrating to the US.

President-elect Donald Trump has taken a hardline stance against illegal immigration. ( AP: Alex Brandon )

Coalition frontbencher Christopher Pyne on Friday refused to say if a deal was imminent, but said there was "plenty of time" for one to be struck before Mr Trump entered the White House next January.

"Peter Dutton and the Prime Minister will make the necessary announcements about Government policy in this area," he told Channel 9.

"But there's certainly time — two-and-a-half months is plenty of time, and if it's the case it will be another great achievement from the Turnbull Government."

Shadow Immigration Minister Shayne Neumann welcomed the prospect of a deal with the US but was keen for further detail from the Federal Government.

"We'd be very happy with a country like the United States being a place where genuinely-assessed refugees find a home for themselves," he said.

"The United States is one of the powerhouses of resettlement arrangements around the world."

Prime Minister Malcolm Turnbull has refused to discuss the agreement — and on Friday night his office said it "wouldn't comment on speculation".

Manus Island, Nauru a 'dire humanitarian situation'

The imminent breakthrough follows extensive negotiations over the fate of those processed in the two detention centres, re-opened by the former Gillard government.

The United Nations High Commissioner for Refugees (UNHCR), non-government organisations, the Federal Opposition and the Greens have all lined up to excoriate conditions on both Manus Island and Nauru.

The UNHCR in September said it stood ready to assist and urged the Federal Government to speed up the resettlement of refugees, describing it as a "dire humanitarian situation".

Mat Tinkler from Save The Children Australia said while any deal would be welcome news, the delay had caused lasting damage.

"People have spent over three years, three-and-a-half years in a place like Nauru going through a significant amount of trauma," Mr Tinkler said.

While those who have been processed in the facilities are no longer officially detained, their future has been unclear for a number of years.

In September, Mr Turnbull also announced Australia's annual refugee intake would also include people from Central America being held in Costa Rican camps run with American assistance.

He denied at the time it was part of any "people swap" arrangement.

The Coalition has repeatedly argued offshore processing has been an essential part of its border protection policies, arguing it was a powerful disincentive to people who were contemplating a trip to Australia by boat.

It is also dismissed accusations that it had taken a cruel approach to refugees by pointing out that Australia was set to increase its humanitarian intake to 18,750 by 2018/19.