If an agreement is reached, Russell would plead guilty to intentional murder in the five deaths, James Culp said in an email.
The prosecution would likely seek a sentence of life without parole, Culp said.
"If the negotiations are successful, and they appear to be going in that direction, Sgt. Russell would waive the right to assert a defense of lack of mental responsibility for the killings in this case," Culp said.
Russell is accused of going on a shooting spree at the Camp Liberty Combat Stress Center near Baghdad in May 2009.
His defense team has said he has no memory of the killings, and witnesses have said he appeared distant and paranoid before the attack
Russell, who is from Sherman, Texas, is being held at Joint Base Lewis-McChord, about 40 miles south of Seattle.
The shooting was one of the worst instances of soldier-on-soldier violence in the Iraq war and raised questions about the mental health problems for soldiers caused by repeated tours of duty.
A hearing on possible charges was held in August 2009 at Fort Leavenworth, Kan. Two evaluations presented during that hearing said Russell suffered from severe depression with psychotic features and chronic post-traumatic stress disorder.
Russell was nearing the end of his third tour when his behavior changed, members of his unit testified in 2009. They said he became more distant in the days before the May 11, 2009, attack, and that he seemed paranoid that his unit was trying to end his career.
On May 8, Russell sought help at a combat stress clinic at Camp Stryker, where his unit was located. On May 10 Russell was referred to the Camp Liberty clinic, where he received counseling and prescription medication.
Witnesses said the following day they saw Russell crying and talking about hurting himself. He went back to the Camp Liberty clinic, where a doctor told him he needed to get help or he would hurt himself. Russell tried to surrender to military police to lock him up so he wouldn't hurt himself or others, witnesses said.
Military prosecutors say Russell left the clinic and later returned with a rifle he took from his unit headquarters and began firing.
Killed in the shooting were Navy Cmdr. Charles Springle, 52, of Wilmington, N.C., and four Army service members: Pfc. Michael Edward Yates Jr., 19, of Federalsburg, Md.; Dr. Matthew Houseal, of Amarillo, Texas; Sgt. Christian E. Bueno-Galdos, 25, of Paterson, N.J.; and Spc. Jacob D. Barton, 20, of Lenox, Mo.