"The French embassy in Tehran has conveyed an official letter to Iran's Foreign Ministry agreeing to provide bail and written guarantees for the release of Clotilde Reiss," an unnamed government official told the official IRNA agency.
French government spokesman Luc Chatel said France was doing everything it could to free Reiss and was prepared to stand bail.
"The French government has indicated that it was ready for the moment to pay this bail for Clotilde Reiss," he told i-tele television.
"The government's aim is to obtain her final release," he said.
Reiss, 24, was arrested on spying charges on July 1 as she prepared to return home after five months spent working as a teaching assistant at the University of Isfahan. She is currently awaiting sentencing after standing trial last week.
She has been accused of taking part in a Western plot to destabilize the Iranian government following unrest after the June 12 election in which hardline President Mahmoud Ahmadinejad was re-elected.
France has dismissed the charges as baseless and has pressed Tehran for her immediate release.
Tehran prosecutor Saeed Mortazavi said Reiss would have to stay in Iran even if she is allowed out on bail.
"Clotilde Reiss is not allowed to leave Iran until her sentence is issued and she is punished for her crimes," Mortazavi told the semi-official Fars agency.
"Reiss is under arrest. But her trial procedure is finished. Any decision on whether she should be released on bail until the sentence is issued … depends on the judge of her case."
French officials have said that Reiss, who took photographs of demonstrations that broke out after the June 12 election and sent them to friends over the Internet, could stay in the French embassy in Tehran if she were released on bail.
On Tuesday, a statement from President Nicolas Sarkozy's office said a staff member from the French embassy in Tehran also on trial for spying had been released from jail although she was still being prosecuted.
Along with Reiss, Nazak Afshar, who works at the cultural section of the embassy, is among dozens of defendants facing mass trials aimed at cracking down on the protests that erupted after the disputed election.
(Editing by Michael Roddy)
