Yentob and his fellow former Kids Company trustees have until 20 December to agree to voluntary boardroom bans, the minimum of which is five years.
The Insolvency Service will pursue formal disqualifications in the event that an agreement is not reached by the deadline, according to Sky News. Yentob was initially to face a six-year ban, it reported, but has negotiated a reduction.
In July, reports stated that business secretary Greg Clark wanted to bring qualification proceedings against Yentob and the seven other directors for their role in the collapse of the failed charity.
The proceedings were brought against chief executive Camila Batmanghelidjh, however the latest negotiations will not extend to her and proceedings to disqualify her from boardrooms are expected.
Last month, UK charity regulators called upon auditors to be more proactive when auditing charities, following from the collapse of the Kids Company in August 2015.