The dispute puts four ASEAN nations with competing territorial claims up against China, which claims most of the body of water.
Delegates have publicly downplayed tensions about the South China Sea dispute.
Meanwhile, China has built strong relationships across the region, in countries like Cambodia, which could divide Asean countries.
A senior State Department official said the talks will take place Friday on the sidelines of a conference in Cambodia.
China says ASEAN is not the place to resolve these dispute because it is not about the regional forum.
Four ASEAN members - Brunei, Malaysia, the Philippines and Vietnam - claim overlapping parts of the South China Sea.
Secretary of State Hillary Clinton is expected to focus more on economic than military concerns as she tours Southeast Asia this we
Asean leaders are expected to approve the declaration in a major summit in November.
The feeling from ASEAN officials was that Burma, should be rewarded.
Regional tensions have risen recently, with Vietnam and the Philippines accusing China of aggressive behavior in the sea.
The meetings come amid rising tensions between ASEAN members and China over the South China Sea.
US Secretary of State Hillary Clinton’s trip to the Asean Regional Forum in Phnom Penh next week will mark her second visit to Cambodia.