2009 world champion Jenson Button appears poised to leave Brawn GP, which has been bought and renamed by Mercedes, and join McLaren for the 2010 season.
The Guardian newspaper said a three-year, 18m pounds sterling (in total) contract is set to be signed by the 29-year-old Briton, at the end of a protracted salary-increase standoff with Brawn management.
The Daily Mail said the deal could be completed before the end of the week.
"The one thing we don't want is Jenson left in limbo," said Button's manager, Richard Goddard.
Brawn chief executive Nick Fry hinted at the outcome in conversation with BBC radio on Monday.
"We've had discussions with Jenson which we think are (about) a sensible salary and you know this (the Mercedes buyout) is not going to change anything in that respect," he said.
"I hope Jenson is still with us next season. But we have to recognise that formula one is not divorced from the rest of the world.
"The reason we survived as a team was that we operated in a sensible way, within our means," Fry said.
The Mirror quoted Fry as saying Button is Brawn's "no.1 priority" but questioned whether McLaren is actually offering him a better deal.
"He's got to decide how much the loyalty, and everything we have given him, counts and how much money counts if he is able to get more elsewhere -- which, frankly, I doubt," he said.
It is reported that McLaren's offer is at least 2m pounds per year higher than Brawn's, but The Times cited Brawn sources in insisting that Button has actually been offered 8m and wants more.
Fry also backed away from speculation that, with Nico Rosberg almost certain to race with Mercedes GP in 2010, the Stuttgart carmaker is pushing for another German to be his teammate.
"I can confidently say that that is totally incorrect," Fry said. "Clearly a German driver would be nice for them (Mercedes) but we don't need two German drivers, that's not the intent."
Mercedes' Norbert Haug confirmed: "We definitely do not want to have a pure German team. It's an international team and we want to have the best drivers in the car."
Daimler chairman Dieter Zetsche said Mercedes would not "dictate" the identity of the lineup to team boss Ross Brawn.
"We will talk and listen to what he wants to do and typically agree," he said.