According to the Telegraph, the document is based on existing free trade deals struck by Brussels with countries around the world.
The legal text was originally commissioned by former Brexit Secretary David Davis and would be presented to the EU as a way of avoiding a no deal Brexit.
Mr Davis quit the Cabinet in proteMichel Barnierst at Theresa May’s Brexit vision, which would see the UK maintain close economic ties with the EU in the future.
In a major blow to the Prime Minister, EU chief negotiator Michel Barnier this week rejected the central plank of her plan, which would see Britain collect tariffs on behalf of Brussels.
Mr Davis told the Telegraph: “When we get to October if we have got no resolution we have got a real-time problem. If there exists an off-the-shelf and fully written-up treaty – a complete legal text – we can then go round to the European states and say this is much better than no deal.
“I called it the reserve parachute. It’s ready to go. It would be attractive to European countries wanting to avoid no deal and losing the £39 billion Brexit divorce bill.”
Meanwhile, Austrian Chancellor Sebastian Kurz has publicly warned Theresa May to avoid a hard Brexit.
Speaking after holding talks with the Prime Minister in Salzburg, Mr Kurz said he viewed the UK’s decision to leave the EU ” very negatively”.
He said: “Of course, it has been taken by the British people so now we have to find a way to deal with it, and from our point of view it is important to avoid a hard Brexit.”
Mrs May hailed the strength of the UK-Austria relationship, adding: “We are delivering on a vote of the British people, they chose to leave the EU and we will deliver that.”
She went on to hold talks with Czech PM Andrej Babis before heading off for her summer holiday.