The companies plan to sign a letter of intent as early as Monday and Audi parent Volkswagen Group’s supervisory board will discuss the matter later this month, according to the report.
Audi’s interest in McLaren first emerged late last year.
McLaren Racing CEO Zak Brown said its F1 team was "definitely not for sale" and also was not looking for further equity partners. He has, however, confirmed that the two sides have had talks.
Last week sources said VW Group was ready to give Audi and Porsche the go-ahead to become part of F1 at a meeting this week.
McLaren is also continuing discussions with BMW Group and signed a memorandum of understanding with the automaker on March 24 about the joint development of an architecture for electric sports cars, according to Automobilwoche.
The agreement is not binding and could be voided by a deal with Audi, the report said.