Judge Juan Merchan, who presided over Trump's trial, signalled in a written decision on Friday that he would sentence the former and future president to what's known as a conditional discharge, in which a case gets dismissed if a defendant avoids rearrest.
The development marks yet another twist in the singular case.
Trump was convicted in May of 34 counts of falsifying business records.
They involved an alleged scheme to hide a hush money payment to porn actor Stormy Daniels in the last weeks of Trump's first campaign in 2016.
The payout was made to keep her from publicising claims she'd had sex with the married Trump years earlier. He says her story is false and he did nothing wrong.
After Trump's November 5 election, Merchan halted proceedings and indefinitely postponed the sentencing so the defence and prosecution could weigh in on the future of the case.
Trump's lawyers urged Merchan to toss it. They said it would otherwise pose unconstitutional "disruptions" to the incoming president's ability to run the country.
Prosecutors acknowledged there should be some accommodation for his upcoming presidency, but they insisted the conviction should stand.
They suggested various options, such as freezing the case during his term or guaranteeing him a no-jail sentence.
They also proposed closing the case while formally noting both his conviction and his undecided appeal - a novel idea drawn from what some state courts do when criminal defendants die while appealing their cases.
Trump takes office January 20.
