Sept 22 (Reuters) - New York City Mayor Michael Bloomberg is expected to announce an out-of-court settlement on Monday with the only gun retailer that continued to battle the city's lawsuit seeking tougher selling rules on out-of-state gun dealers, The Wall Street Journal reported on its online edition.

The Virginia gun dealer, Bob Moates Sport Shop, agreed to new rules based on stricter standards that Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz), the nation's largest seller of firearms, adopted earlier this year, according to a copy of the agreement obtained by the paper.

The Virginia retailer was the sole active defendant in civil cases that New York has brought against 27 gun dealers in five states Virginia, Georgia, Ohio, South Carolina and Pennsylvania on grounds that their sales practices allowed criminals to buy guns and then bring them into the city.

Wal-Mart, which was not part of the lawsuit, earlier this year agreed to a 10-point code, including rigid inventory controls, with a bipartisan coalition of Mayors Against Illegal Guns led by Bloomberg.