The Inspector-General of Intelligence and Security informed lawyers for Daniel Edmund Duggan it had launched a formal inquiry into the matter, solicitor Dennis Miralis said.

Attorney-General Mark Dreyfus said he would not confirm the reports.

"I have commenced extradition proceedings as is my role as attorney-general at the request of the United States," he told the ABC.

"Those proceedings will now take place in a court and consequently I'm not going to comment further."

It follows a complaint to the watchdog on Duggan's behalf in which his representatives alleged the Australian Security Intelligence Organisation might have been involved in getting the pilot back to the country so he could be arrested and ultimately extradited to the US.

Duggan had to go through security checks to obtain his aviation security identification card to work in Australia and was given clearance even though authorities knew he was indicted in the US, Mr Miralis said.

His legal team is also calling for Mr Dreyfus to bring the US-instigated extradition proceedings to an end to ensure the independence and integrity of the security watchdog's investigation.

Duggan's case could also raise questions about the legalities of previous extraditions involving the US, Mr Miralis said.

"It's no trivial matter in our view to have the inspector general announce an inquiry into a national security agency where the conduct of that national security agency directly goes to the heart of the extradition proceedings," he said.

When contacted, representatives for both ASIO and the attorney-general said they were unable to comment.

Duggan, a 54-year-old father of six, was arrested in October 2022 after the US government accused him of money laundering and committing offences under arms export control laws - allegations he denies.

According to a 2017 indictment unsealed by a US court in December, Duggan provided military training to Chinese pilots through a South African flight school on three occasions in 2010 and 2012 while he was a US citizen.

He became an Australian citizen in 2012, 10 years after leaving the US marines.

Duggan's legal representatives plan on Monday to send a formal letter to the attorney-general requesting his release.

The former pilot's mother died earlier this week, days after having a stroke in the US.

Duggan was only able to speak to her once while she was comatose and a family member held a phone to her ear in the days before she died, his representatives said.

His wife Saffrine earlier this week called for him to be moved from a maximum security prison in Lithgow to home detention to contest his extradition and farewell his mother.

Duggan's case is proceeding through the NSW local court, where a magistrate will rule whether he is eligible for extradition.

It will then be up to Mr Dreyfus to make the final decision.

Australian Associated Press