The Ulster Defence Association has begun steps towards disarming, NI Secretary Shaun Woodward has confirmed.
The UDA has been under pressure to disarm
The loyalist paramilitary group had been given a deadline of 9 October to decommission by Social Development Minister Margaret Ritchie.
She had threatened to withdraw £1.2m funding for a loyalist project.
Mr Woodward said the UDA had met the Independent International Commission on Decommissioning to discuss how it could put its weapons beyond use.
"The commission has confirmed that meaningful engagement and negotiations have started," he said.
"Named interlocutors have been appointed and further meetings are planned."
The UDA has been meeting the commission led by General John De Chastelain for more than two years.
Mr Woodward's welcome for this new development will put pressure on Ms Ritchie.
The social development minister has insisted she will end funding for a three-year loyalist conflict transformation project, unless actual decommissioning of weapons begins by Tuesday.
This appears unlikely, given Friday's UDA statement indicating that it will not be pressurised into decommissioning as it had agreed its own timetable with its members.
Loyalist sources insist that a process is underway that could lead to decommissioning at a later date, and it appears that Mr Woodward has endorsed this view.