Ms Bhutto said in London that she expected to be given an amnesty on corruption charges against her.
Gen Musharraf is expected to be re-elected president by legislators on Saturday but wants Ms Bhutto to stop any boycott of the vote by her MPs.
Ms Bhutto has lived in self-exile since before the general took power in 1999.
She has pledged to return to Pakistan on 18 October to fight general elections.
Credibility
Speaking ahead of talks with her opposition Pakistan People's Party (PPP) in London, Ms Bhutto said: "We are expecting an ordinance today, yes.... There have been a lot of talks. We'll have an announcement later."
Her spokesman, Wajid Hasan, told Agence France-Presse news agency it was "definitely an amnesty".
Pakistan cabinet minister Sheikh Rashid Ahmad said in Islamabad the government was close to an agreement on power-sharing.
Ms Bhutto's party had threatened a mass resignation of lawmakers to undermine the credibility of Saturday's vote.
In addition to the amnesty, Ms Bhutto wants the president to give up his power to sack the prime minister.
She also wants the repeal of a law banning anyone from being prime minister for more that two terms.
She and political rival Nawaz Sharif have both been prime minister twice before.
Courtesy: BBC News
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