Ahmadullah Niazi was charged in 2009 with lying about ties to terrorist groups on his citizenship application.
Court papers filed Wednesday show the U.S. attorney's office has asked to drop the charges.
Niazi had been charged during an investigation aided by former FBI informant Craig Monteilh, who infiltrated a mosque in Southern California.
Monteilh later filed a lawsuit alleging he was mistreated by the agency.
Monteilh spied on mosques for the FBI for more than a year from 2006 to 2007.