According to Aljazeera, president Donald Trump’s administration officials told the Associated Press news agency that Congress would be notified of the move on Friday.
A ribbon-cutting ceremony is reportedly being planned for mid-May.
The announcement means the move would come much faster than expected.
US Vice President Mike Pence in late January said the controversial embassy would open in 2019.
The US decision to move its embassy from Tel Aviv to Jerusalem prompted angry protests in Palestine and solidarity rallies across the world.
For Palestinians, May 15 marks Nakba Day, or the “catastrophe”, when they commemorate the mass displacement of Palestinians to make way for the state of Israel.
Between 1947 and 1949, at least 750,000 Palestinians, out of a population of 1.9 million, were expelled from or fled their homes in Palestine.
Israel Katz, Israeli intelligence minister, thanked Trump for the announcement.
“There is no greater gift than that! The most just and correct move. Thanks friend,” Katz said in a tweet.