Prince Andrew will give up his title as Britain's "special representative" but will continue to travel the world in a less formal role to promote UK trade, the Daily Mail reported.
He is said to have already consulted with the Queen and spoken to Downing Street about the move which comes after intense controversy over his links to an American sex offender.
It is expected that he will make an announcement about his future in the next few days.
He is reported to be preparing to take up a new role promoting the Government's drive to boost the number of apprenticeships for young people.
The Duke came under intense pressure to resign as trade envoy earlier this year over his friendship with Jeffery Epstein, the American billionaire who pleaded guilty to solicitation of prostitution and a single charge of procuring minors for prostitution in 2008. He was sentenced to 18 months in prison.