Lawyers for the Liz & Dick star were apparently working with Santa Monica prosecutors to help resolve a possible probation violation relating to Lohan allegedly lying about a June 2012 car crash.
Inside sources disclosed to TMZ that Lohan would have been required to enter rehab for at least 30 days and attend AA classes, in exchange for being spared any time behind bars.
Lohan's lawyers met with Santa Monica prosecutors on Wednesday (February 27), but Lohan was reportedly very much against the plea agreement.
The star is apparently resistant to accepting any time in rehab because she doesn't feel that she has any substance abuse problems.
A new plea deal is still possible and negotiations are believed to be ongoing, but an agreement will need to be reached before Lohan's trial is slated to begin on March 18.
Lohan has not officially commented on this latest rumoured development.
The Mean Girls actress is also notably facing a separate criminal charge for allegedly being involved in an altercation at a New York nightclub.
View all of today's best celebrity pictures - Photo gallery: