The Shin Bet intelligence service said he had supplied Iran with “information related to the energy sector, security sites in Israel and officials in political and security institutions”.
He also twice visited Iran for meetings with his handlers and received an encrypted communications system from Iranian agents, it added.
Segev, who is a trained doctor, served in governments led by Yitzhak Rabin and Shimon Peres in 1995 and 1996.
He was jailed for five years in 2005 for trying to smuggle tens of thousands of ecstasy tablets into Israel from the Netherlands and was released two years later.
The plea deal has yet to be formally approved by an Israeli court, Reuters reported.
Iran did not immediately respond to the development.
