Israel Radio says Prime Minister Ehud Olmert has told his Cabinet that he will resign.
The report did not say when Olmert would submit his official letter of
resignation to President Shimon Peres, but he is expected to meet with him later Sunday.
The two - who have already spoken several times about the resignation - will consult regarding Olmert's final date in office. However, the final decision may be delayed by Peres' departure on Monday in order to attend the United Nations General Assembly in New York, where he is scheduled to stay for a week and to deliver a speech to world leaders.
At the beginning of the meeting, Olmert gave his blessing to new Kadima chief Tzipi Livni, and vowed to "support with all of my strength" in her forming of a coalition government.
Peres has said that, should it be necessary, he will postpone his trip to New York to meet with various Knesset party leaders and discuss the formation of a new government.
Olmert spokesman Mark Regev said he could not confirm the report that the prime minister would submit his official letter of resignation to Peres immediately after the weekly cabinet meeting. The president's office also said it could not confirm that Olmert would officially resign on Sunday.
Last week, Regev told The Associated Press that Olmert would notify the Cabinet on Sunday that he was stepping down. But no precise date for his official resignation was disclosed.
Foreign Minister Tzipi Livni, who was elected last week to succeed Olmert as head of the governing Kadima Party, was busy over the weekend lobbying potential partners to join a new coalition under her leadership.
Olmert's associates said Saturday that he intends to serve as head of a caretaker government until an alternative government is formed or until general elections take place.
Divisions emerged within Kadima on Friday regarding when the premier should step down. Vice Premier Haim Ramon said that Livni should ask Olmert to postpone his resignation until she has succeeded in forging a new government.
Livni on Friday called on Olmert to keep his promise to leave office in the aftermath of Wednesday's Kadima primary, saying, "We have a country to run."
Olmert is stepping down amid a number of corruption allegations, after a tenure troubled by Israel's inconclusive 2006 war against Lebanese Hezbollah guerrillas and months of peace talks with the Palestinians that have yielded no breakthroughs.
Even though Livni is now head of Kadima, she does not automatically become prime minister. Peres would have to first appoint her to try to put together a governing coalition - something he is expected to do after Olmert formally resigns. After assigned that task, Livni would have six weeks to form a new government. Should she fail, new elections would be called for early 2009, a year and a half ahead of schedule.
Over the weekend, Livni met with leaders of two small factions outside the coalition, hoping to shore up any government she could put together. Any accords that might emerge from talks with the Palestinians and recently renewed, indirect negotiations with Syria would benefit from broad-based parliamentary backing. The current government controls 67 of parliament's 120 seats.
Neither Kadima nor its coalition partners appear eager for a new election, fearing they would be ousted from power. But the ultra-Orthodox Shas Party, which could be key to building a new coalition, has already said it would not join a government willing to share Jerusalem with the Palestinians.
As lead peace negotiator, Livni is committed to discussing all the outstanding issues between Israel and the Palestinians. The fate of Jerusalem, whose eastern sector the Palestinians claim for a future state, is at the core of the conflict.