Paul Manafort pleaded guilty to one count of conspiracy against the United States and one count of conspiracy to obstruct justice. Ten other counts have been dropped as part of the plea deal.
Manafort, 69, appeared in court on Friday and becomes the most prominent former Trump campaign official to plead guilty as part of Mr Mueller’s investigation.
He will co-operate with that investigation as part of the deal, prosecutors told a federal court in Washington on Friday.
The charges in question do not involve Manafort’s work for Donald Trump.
In a statement, the White House distanced the US president from the veteran Republican operative.
Spokeswoman Sarah Sanders said: “This had absolutely nothing to do with the president or his victorious 2016 presidential campaign.
“It is totally unrelated.”
Sky News diplomatic editor Dominic Waghorn said the development was potentially “hugely significant”.
He said that, because the deal includes Manafort’s co-operation with Mr Mueller’s investigation into Russian collusion in the Trump campaign, it could be bad news for the president.
“We don’t have all the details yet but I’d say the signs for Donald Trump aren’t very good because… Manafort will know a lot about Donald Trump and his dealings, not just in America but overseas.
“If he’s helping out Mueller, that’s more bad news for Trump.”
In August, Manafort was found guilty of bank and tax fraud in a trial that lasted more than two weeks.
The jury convicted him of five counts of filing false income tax returns, one count of failing to file a report of a foreign bank account in 2012 and two counts of bank fraud.
The judge declared a mistrial on 10 other charges after the jury failed to reach a verdict.
Manafort made millions of dollars working for pro-Russian Ukrainian politicians before taking an unpaid position with the Trump campaign for five months.
He led the presidential campaign in mid-2016 when Mr Trump was selected as the Republican nominee at the party convention.
Jury selection was due to begin on Monday in a second trial for Manafort on charges including conspiring to launder money, conspiring to defraud the US, failing to register as a foreign agent and witness tampering.