The official, who spoke on the condition of anonymity because negotiations have not been completed, said no announcement would be made Sunday.
The potential sale, reported Sunday by The Wall Street Journal on its Web site, comes after nearly two months of study and negotiations by several companies interested in buying DaimlerChrysler's troubled U.S. operations.
The German company announced Feb. 14 that all options were open for the automaker, which lost $1.5 billion last year and is undergoing a restructuring plan that will eventually shed 13,000 jobs.
Cerberus spokesman Peter Duda in New York would not comment on the deal.
Thomas Froehlich, head of corporate communications with the German-American automaker in Stuttgart, said neither he nor the company had any official comment on whether any deal had been struck, much less the timing of any announcement.
"I cannot comment," he told The Associated Press from Germany.
German Union officials, who have a strong say on the DaimlerChrysler board, would not comment on the developments, either.
Messages seeking comment were left Sunday for United Auto Workers spokesman Roger Kerson and for officials at Chrysler headquarters in Auburn Hills.
Analysts have said it's likely DaimlerChrysler would retain a minority stake in Chrysler if it is sold because the two companies are still intertwined.
Last year, General Motors Corp. sold a majority stake in its General Motors Acceptance Corp. financing arm to a consortium of investors led by Cerberus for about $14 billion. Analysts have said buying a big stake in Chrysler could be attractive to Cerberus because it could combine GMAC operations with Chrysler Financial.
The Wall Street Journal reported Sunday that Cerberus would keep Chrysler Chief Executive Tom LaSorda in place, while former Chrysler Chief Operating Officer Wolfgang Bernhard could get a board seat. Cerberus has retained Bernhard as an adviser.
The Journal also reported that key to the deal is who picks up Chrysler's staggering health care liabilities for hourly retirees. The liability is estimated at $19 billion.
In December, Cerberus was part of a consortium of investors that said it would invest $3.4 billion in the struggling auto parts giant Delphi Corp. in exchange for new shares of Delphi stock as it emerged from Chapter 11 bankruptcy protection.
The private New York-based equity company was to have put up half the total.
But the UAW was reluctant to grant concessions sought by Cerberus, and Delphi said last month that Cerberus was pulling out of the group, although as recently as last week that had not happened.
On its Web site, Cerberus said the companies in which it has a controlling or significant minority stakes "generate over $60 billion in annual revenues."
The company also has offices in Atlanta; Chicago; Los Angeles; London; Baarn, Netherlands; Frankfurt, Germany; Tokyo and Osaka, Japan; and Taipei, Taiwan.
Its worldwide investments include businesses involved in aerospace and military, autos, building products, retailing, financial services, health care, distribution, paper and packaging, real estate, telecommunications, transportation and travel.