US Ambassador to Australia Caroline Kennedy has hinted at a possible deal to allow Wikileaks founder Julian Assange to return to Australia. 

Mr Assange has been facing extradition to the US on spying charges for more than a decade and claimed sanctuary in London's Ecuadorian Embassy for seven years.

But now ambassador Kennedy has said a solution could be in the pipeline to end the long-running saga. 

'It's not really a diplomatic issue, but I think that there absolutely could be a resolution,' she has told the Sydney Morning Herald.