Russia presented a draft resolution to the other 14 members of the council aiming to end the sanction, the country`s UN envoy Vitaly Churkin told reporters.
NATO members said the council would have to pass a new resolution on Libya after the death of the dictator on Thursday but that the north African country`s transitional government did not want the no-fly zone immediately lifted.
The North Atlantic Treaty Organization has said it will end its seven-month mission in Libya on October 31 but will issue a formal decision next week after consulting the United Nations and Libya`s interim authorities.
Russia, China and other emerging powers strongly criticized NATO`s airstrikes in Libya, accusing the alliance of breaching UN Security Council resolutions 1970 and 1973 which ordered sanctions against Kadhafi and allowed measures to protect civilians.
Churkin said Russia would pursue negotiations with the western powers on a resolution to end the military sanctions. "Of course we are going to work on that in close coordination with Libyan authorities," he said.
"We all understand that some crucial changes have taken place in the situation in Libya. We expect a declaration of liberation to be announced, maybe even tomorrow, so given all those circumstances it is time to wrap it up, including the no-fly zone," he said.
The French and British ambassadors to the UN said there were technical obstacles to immediately lifting the no-fly zone.
French envoy Gerard Araud said the airspace is currently controlled by NATO and Libyan authorities had to be ready to take control. The text of a Libya resolution would be negotiated in coming days, he added.
Britain`s UN envoy Mark Lyall Grant said NATO had spoken with the National Transitional Council leaders on Friday.
"And they made clear that they didn`t want a premature ending of the military authorizations so we want to proceed in a slightly more measured way."
He predicted "chaos in the air" if there was no managed changeover from NATO to Libyan control of the airspace.
NATO chief Anders Fogh Rasmussen said in Brussels that he would be consulting with the United Nations and the National Transitional Council in the coming days on the formal declaration ending the military campaign.