Deputy attorney general Rod Rosenstein has been summoned to the White House where he is expecting to be fired by President Donald Trump.
He has said he will not resign and that the White House would have to sack him, NBC reported.
Mr Trump himself was in New York for a meeting of the UN General Assembly.
It comes three days after Mr Rosenstein was reported to have suggested the idea of secretly recording Mr Trump last year after the president had fired James Comey, the FBI director, according to the New York Times.
Mr Rosenstein was also accused of making critical comments about the US president.
Any termination or resignation would have immediate implications for special counsel Mr Mueller’s investigation of possible collaboration between Russia and the Trump campaign before the 2016 presidential election.
Mr Rosenstein appointed Mr Mueller and oversees his investigation.
Mr Trump had previously considered the idea of firing Mr Rosenstein in April after FBI raids of the office and home of the president’s longtime personal attorney, Michael Cohen.
Cohen has since pleaded guilty to several felonies and taken part in hours of interviews with Robert Mueller.
But the latest move follows the New York Times report of Mr Rosenstein’s comments last year, which played to some of the president’s concerns about a secret “Deep State” trying to undermine him from within the government.
Mr Rosenstein subsequently said the article was inaccurate and was based on “biased” anonymous sources “advancing their own personal agenda”.
He added: “Based on my personal dealings with the president, there is no basis to invoke the 25th Amendment.”
The Justice Department also released a statement from an individual who claimed Mr Rosenstein’s recording comment was meant sarcastically.
As of Sunday, Mr Trump has been ambivalent over what to do about Mr Rosenstein.
Some of his confidants urged him to fire Mr Rosenstein, while others suggested he wait and see if the report was incorrect, or if it was planted by some adversary.