NEW YORK, May 31 (Reuters) - Citigroup Inc. is expected to close its Banamex USA unit after government authorities began probes of possible violations of anti-money laundering laws, the Wall Street Journal said on its website on Sunday.

The bank has suggested the shutting the unit with regulators as a part of talks to settle the probes into Banamex USA's anti-money laundering controls, the paper said, citing people familiar with the matter.

Regulators are not seeking such a move from Citigroup, but they want the unit to pay more than $100 million to settle the allegations, according to those people.

Discussions between Banamex USA, the Federal Deposit Insurance Corp. and the California Department of Business Oversight have been going on for more than a month and the expected settlement is still likely weeks away, the Wall Street Journal said.

Citigroup in 2001 bought Banamex USA from Banamex, Mexico's second biggest bank. It mainly focuses on consumers who routinely need to move money across the border, such as U.S. citizens living in Mexico.

(Reporting by Richard Leong; Editing by Sandra Maler)