An announcement was expected later Friday confirming that deposed world champion Fernando Alonso will leave McLaren, the Marca sports daily reported.
The 2005 and 2006 Formula One king has been involved in intense contract negotiations with the team in England over the last two days, but the two sides have been unable to reach an agreement for next season.
The 26-year-old Spaniard has had a controversial year with McLaren which has seen him at loggerheads with team chief Ron Dennis for much of the season and it had been widely expected he would move on.
His former employers at Renault have expressed their interest in taking him back, but Marca said Alonso might prefer to sign up for a smaller team with a view to eventually finding an opening at Ferrari.
Alonso saw his hopes of winning a hat-trick of world titles vanish in the final Grand Prix of the season in Brazil last month with Ferrari's Kimi Raikkonen snatching the prize away from him and team-mate Lewis Hamilton.