If all goes well, Nick Diaz could return to action come next summer.
Settlement talks between representatives of the former Strikeforce welterweight champion and the Nevada Athletic Commission for a reduced penalty over Diaz's marijuana violations have been "significant" and "positive," according to sources with knowledge of the situation.
If negotiations proceed on the current path, Diaz, who was suspended for five years and fined $165,000 for his third marijuana violation in the state, would have his penalties cut to 18 months and $100,000.
MMAFighting.com's Ariel Helwani reported the news on Wednesday's edition of UFC Tonight.
Diaz's extraordinary punishment was handed down after a contentious hearing in front of the NAC in Las Vegas in September. However, after an unprecedented backlash -- including a petition submitted to the White House to overturn the decision after successfully reaching a 100,000-signature threshold -- and an expected protracted legal case, the two sides entered settlement talks.
Diaz, whose lead counsel, Lucas Middlebrook, was widely lauded for his handling of the hearing, is being represented in the settlement talks by the UFC's law firm, Campbell & Williams.