The 82% taxpayer-owned bank is likely to announce a settlement with the Financial Services Authority (FSA) and US regulators at lunchtime today.
Regulators are also expected to reveal whether or not the bank faces criminal charges in relation to fixing Libor.
But RBS is under pressure from the Government to pay the fine out of its bonus pool, with Chancellor George Osborne insisting the taxpayer should not pay for bankers' mistakes.
Business Secretary Vince Cable also weighed into the debate, saying risk-taking bankers should foot the multimillion-pound bill - not taxpayers.
Around £100m of the fine will be clawed back from hundreds of senior managers across RBS' markets business, as revealed by Sky News last week.
Although this could be controversial, as many of those whose bonuses will be reclaimed may not have been involved in manipulating the rate.
The bank is still expected to hand its staff hundreds of millions of pounds in payouts for last year's performance.
The Treasury said any UK fine paid to the FSA will go to charity, although the majority of the penalty will be split between the US Department of Justice and the Commodity Futures Trading Commission.
It comes after Sky's City Editor Mark Kleinman revealed that RBS' investment banking boss, who was brought in to rescue the business after it was bailed out in 2008, will step down.
John Hourican will forfeit around £4m in share options awarded to him based on past performance, but will receive a year's salary in lieu of notice worth around £700,000, Sky News revealed.
But both regulators and the bank's board acknowledge he had no knowledge of, or involvement in, Libor-rigging.
RBS is one of about 20 banks being investigated for manipulating Libor, the rate banks charge to lend one another.
It governs the price of more than $500trn (£320trn) worth of loans and transactions around the world, including mortgages.
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