Egyptian army chief Field Marshal Abdel Fattah al-Sisi was meeting military leaders on Wednesday to tell them he was resigning as defence minister to run for the presidency, the state-run Al-Ahram newspaper reported on its website.
Quoting a military source, Al-Ahram said Sisi would announce the widely expected decision in a statement to be broadcast later.
Sisi, 59, must leave the army to run in the presidential election, which he is widely expected to win easily. No date for the vote has yet been set.
Sisi deposed President Mohamed Mursi of the Muslim Brotherhood, Egypt's first freely elected leader, last year following mass protests against his rule.
He is popular among Egyptians who supported the army's decision to remove Mursi from power one year into his term, seeing him as the kind of strong man needed to end the turmoil dogging Egypt since a popular uprising ended Hosni Mubarak's three decades of one-man rule in 2011.
The former head of military intelligence, Sisi has been lionized by state- and privately-run media hostile to the Muslim Brotherhood, but he is reviled by the Islamist opposition which sees him as the mastermind of a coup against an elected leader and the author of a fierce crackdown on dissent.
Egypt has suffered the bloodiest internal strife in its modern history since Mursi was overthrown.
On Wednesday, police clashed with protesters at Cairo University who were demonstrating against a court's decision to sentence 529 supporters of the Muslim Brotherhood to death.
The court ruling on Monday marked an escalation in the state's campaign against the Islamist opposition and drew criticism from international human rights groups. The United States, a major donor of military aid to Egypt, said it was shocked by the sentences.
Activists from a group called "Students Against the Coup" called for protests on Wednesday against the sentences. Students clashed with police at Cairo University. A Health Ministry official said one person was killed and eight wounded.
A Reuters witness saw protesters, some wearing gas masks, throw burning projectiles at police and police fire rubber bullets and tear gas.
Security sources said police had fired tear gas at between 500 to 600 protesters.
Sisi had called the meeting of the Supreme Council of the Armed Forces to inform the council of "his resignation as defence minister, paving the way for the announcement of his candidacy for the presidential election", Al-Ahram reported.
Leftist politician Hamdeen Sabahi, who came third in the 2012 election won by Mursi, is so far the only candidate to have stated his intention to run in the presidential election.
General Sedki Sobhi, who holds the post of chief of staff, is expected to replace Sisi as army chief and defence minister.
(Writing by Tom Perry; Editing by Michael Georgy and Janet Lawrence)