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Mr Flynn admitted that he had “inadvertently briefed the vice president-elect and others with incomplete information regarding my phone calls with the Russian ambassador”.
It comes amid claims he had discussed sanctions with Moscow’s US ambassador before Mr Trump took power – and before he had officially taken up his own role.
Any attempt to conduct diplomacy on behalf of the United States while not yet in office could potentially be regarded as illegal.
Mr Flynn at first told Vice President Mike Pence he had not discussed sanctions during the meeting with the ambassador, prompting Mr Pence to defend him in a TV interview.
In recent days however, Mr Flynn admitted he might have raised the subject with the Russians but said he could not be 100% certain.