Kevin Johnson and Cameron Saucier

USA TODAY

In a settlement that will be announced Monday, Citigroup will agree to pay $7 billion to the Justice Department for misdeeds associated with the sale of mortgage-backed securities tied to the 2008 financial crisis, according to a U.S. official with knowledge of the matter and media reports.

The official was not authorized to comment publicly on the settlement and spoke on condition of anonymity.

The bank has been under investigation by federal authorities for faulty mortgage securities that fueled the housing bubble a decade ago. The settlement is far higher than the $3 billion Citigroup had offered to settle, but less than the $10 billion the government was seeking, according to a Wall Street Journal report.

The Monday announcement is set to take place on the same date that Citigroup releases its second-quarter earnings report, scheduled for 8 a.m. ET. According to Thomson Reuters, Citi is expected to post earnings per share of $1.06 vs. $1.25 the same quarter a year ago.

Last year, the U.S.'s largest bank, JPMorgan Chase, fell into a similar tangle with the Justice Department, forking out $13 billion in a settlement for selling toxic mortgage assets, Reuters reported.

According to Reuters, the Citigroup settlement puts an end to months of negotiations during which the government threatened to sue the banking giant.

Along with JPMorgan, Citigroup will be the second major U.S. bank to settle with the Justice Department in the wake of President Obama's orders to increase scrutiny of big banks after the 2008 financial crisis. In early 2012, the president ordered a task force to delve into the risky operations of many banks that sold precarious sub-prime mortgages to Americans.

Citi shares lost 2.6% last week amid a finance market in turmoil and its shares are down 10% year-to-date.