The insurer's board is due to meet on Sunday and the company is on track to announce the overhaul as early as Monday, said the report, citing people close to the situation.
The restructuring, described by one insider as a "controlled break-up", could lead to the end of AIG's 90-year history as a stand-alone global insurance conglomerate.
It also could provide a template for carving up other troubled financial groups – such as Citigroup – should they be brought under government control, the people involved said, according to the report.
Under the plan, the government would swap its current 80 per cent holding in the insurer for large stakes in three units – AIG's Asian operations, its international life insurance business and the US personal lines business. A fourth unit, made up of AIG's other businesses and troubled assets, could also be formed, the FT reported.
In return, the authorities would relax the terms, or even cancel a large portion, of a $60 billion (Dh220bn), five-year loan to AIG and convert $40 billion worth of preferred stock into shares in an effort to ease the company's burden, the paper said.
If the plan goes ahead, AIG would remain as a holding company for now. But people involved in the talks say that that company could disappear if the government decides to recoup taxpayers' investments in the insurer by selling or listing the three divisions separately.
The final shape of the new rescue attempt – the third government bailout of AIG in five months – could still change as talks among company executives, the US Treasury, the Federal Reserve and credit-rating agencies continue.
A spokesman for AIG was not immediately available for comment.