Flynn resigned his position as national security adviser shortly after the reports emerged Monday night.
A White House official also confirmed the warning.
The concern was raised after Flynn claimed he did not discuss with the Russian ambassador the sanctions being imposed by former President Barack Obama's administration in retaliation for Russia's interference in the election. Flynn was not yet in government.
The message was delivered by then-Acting Attorney General Sally Yates. Other top intelligence officials, including James Clapper and John Brennan, were in agreement the White House should be alerted about the concerns.
The Washington Post
first reported the Justice Department message.
Trump fired Yates at the end of January after she told Justice Department attorneys not to defend his executive order suspending the refugee program and temporarily restricting travel to the US from seven majority-Muslim nations. Implementation of the travel ban has since been stalled by the courts and the Trump administration is weighing its options.
A representative for Yates said she no comment.
Flynn is a retired lieutenant general who was the head of the Defense Intelligence Agency under Obama until he was forced out. His resignation less than a month into the Trump presidency marked the second consecutive administration under which Flynn had risen and fallen.
He had been at the center of mounting controversy over the past several days in regard to his contacts with Russian Ambassador Sergey Kislyak. Following initial reports in early January that Flynn was in contact with Kislyak and spoke to him about US sanctions, Vice President Mike Pence offered a robust defense of the incoming national security adviser. He said in nationally televised interviews that he had spoken with Flynn and that Flynn had ensured him he had not spoken about sanctions with the Russian ambassador.
But reports of an investigation showed Flynn potentially misled Pence and criticism of the controversial former military man grew.
Flynn wrote in his resignation letter that he had "inadvertently" briefed Pence and others in the White House with incomplete information about his contacts with Kislyak.
The resignation capped off a a day during which Flynn's public standing within the White House had quickly shifted.
White House senior counselor Kellyanne Conway said on Monday the President had "full confidence" in Flynn. But about an hour later, things had changed.
White House press secretary Sean Spicer offered a much more limited commitment from the President towards Flynn, saying Trump was "evaluating the situation."
An administration official said new information came to light between Conway's comments and the Spicer statement.
Another source said Conway "did not go out there on her own" to say the President had full confidence in Flynn, and that "new information came to light in real time."