Lebanese Internal Security chief Abbas Ibrahim met Iranian officials on behalf of President Michel Aoun on Monday.
Iran will hand over Nizar Zakka, a Lebanese citizen and holder of USA residency who was detained in 2015, to Lebanon's Hezbollah, the semi-official Fars news agency said on Monday, citing an unnamed source.
Quoting an unnamed source, the Fars news agency said the "American-Lebanese spy" was expected to be delivered to Lebanon "only based on request and mediation by Hezbollah Secretary-General Hassan Nasrallah".
Asked about the Fars report, Ibrahim said it had caused "confusion".
A State Department spokesman said on the condition of anonymity that the matter is between Lebanon and Iran.
Last week, Lebanon's Foreign Ministry said efforts to secure Zakka's release had been successful.
Iran's supreme leader Ayatollah Ali Khamenei pardoned 691 prisoners on the occasion of the end of Ramadan, but Zakka was not among them, authorities said Sunday.
Lebanon's president and foreign minister have urged Tehran to grant an amnesty to Zakka, who was detained in 2015 and sentenced in 2016 to 10 years in prison and a $4.2 million fine for "collaborating against the state".
Mr Zakka was detained in Iran in 2015 after arriving in the country to speak at a government conference on the invitation of officials.
Zakka is a US permanent resident from Lebanon who advocated for internet freedom and has done work for the USA government.
In April this year, Iranian Foreign Minister Mohammad Javad Zarif told Reuters he was proposing "a serious dialogue" with the United States on a possible prisoner swap, though he did not say whether Zakka might be included.
On Nov. 3 that year, Iranian state television aired a report saying he was in custody and calling him a spy with "deep links" with USA intelligence services.
The report Monday on state TV's website mirrored a report earlier carried by the semi-official Fars news agency about Nizar Zakka, a Lebanese advocate for internet freedom.