An inside source told Bloomberg that the Fed is considering the move to demonstrate its confidence that the firm is able to lower its reliance on funds from the taxpayer.
Figures recently published by the Fed revealed that AIG owes around $23.5 billion on the credit line, down from about $27 billion in April.
AIG has warned recently that cutting the credit line by $3.6 billion could result in a $600 million accounting charge.
But Robert Benmosche, chief executive officer of AIG, said earlier this month that he expects "meaningful progress" to be made on repayments this year as he seeks to regain independence for the firm.
The company recently released a statement warning that its cash flow and credit ratings could be hit as a result of attempts to comply with the Dodd-Frank Act, reported Bloomberg.
By Gary Cooper