The North Carolina Attorney General's office, which took over the case in January after the local district attorney was accused of ethics violations, said it would have an announcement on the case at 2:30 p.m. EDT.
Defense attorneys expect the charges to be dropped, although they have not received any official word, CBS News reports.
Prosecutors did not say what the announcement would be.
The sensational case had been troubled almost from the start after DNA samples found no link to any of the Duke lacrosse players and the accuser's story about what happened that night began to change. The person who talked to the AP, speaking on condition of anonymity because a formal announcement had not been made, did not say why state prosecutors decided to drop the charges.
Reade Seligmann, Collin Finnerty and David Evans were indicted last spring on charges of rape, kidnapping and sexual offense after the woman told police she was assaulted at a lacrosse team party where she had been hired to perform as a stripper.
The allegations at first outraged the Raleigh/Durham community — the woman is black and attended nearby North Carolina Central University; all three Duke players are white. But that anger largely shifted to Durham County District Attorney Mike Nifong as his evidence against the three fell apart and questions surfaced about the accuser.
Should all charges be dropped, CBS News legal analyst Andrew Cohen says the biggest question is: does the attorney general exonerate the former Duke students completely "or does he simply say that there is not enough evidence to convict them beyond a reasonable doubt."
Nifong, who was away from his Durham office Wednesday, has been charged by the state bar with ethics violations connected to his handling of the case and could face disbarment.
From its earliest days, Nifong had driven the investigation. The 28-year-old woman initially said she was gang-raped and beaten by three white men at the March 13, 2006, party thrown by Duke's highly ranked lacrosse team.
The three indicted players' insisted the accusations were "fantastic lies," and another dancer who had been with the woman also questioned if she had been raped.
At the end, it appeared the case was based only on the testimony of the accuser, whom defense attorneys said had told wildly different versions of the alleged assault.
The other dancer who was at the lacrosse party raised questions about the accusations and Nifong dropped the rape charges in December after the accuser changed a key detail in her story, CBS News correspondent Bob Orr reported. Nifong recused himself a few weeks later after the state bar charged him with violating several rules of professional conduct.
Nifong's recusal in January put the players' fate in the hands of North Carolina Attorney General Roy Cooper, who promised "a fresh and thorough review of the facts."
The North Carolina State Bar charged Nifong with making misleading and inflammatory comments about the athletes under suspicion. It later added more serious offenses of withholding evidence from defense attorneys and lying to the court and bar investigators. He's scheduled to stand trial on those charges in June.
Nifong had accused the team of refusing to cooperate, calling them "a bunch of hooligans," and promised DNA evidence would finger the guilty. His case started to erode, though, when no DNA evidence tying any player to the accuser was found.
The players largely cooperated with police, and the defense later said a series of tests Nifong ordered from a private lab found genetic material from several men on the accuser's underwear and body, but none from any member of the Duke lacrosse team.
"Even if the charges are dropped later today and the defendants seek to sue prosecutor Mike Nifong for the way he handled the case, they are going to have their hands full winning that civil case," Cohen says. "All public officials, and prosecutors in particular, are afforded tremendous immunity from lawsuits when they are acting in their official capacities, as Nifong was here."
Seligmann, 21, of Essex Fells, N.J., and his family arrived at Raleigh-Durham International Airport on Tuesday, and attorney Wade Smith said the Finnerty family was also expected to arrive later Tuesday from their home in Garden City, N.Y.
"We are not going to have any expectations until we hear officially," Smith said. "When we get the word, we'll have the word."
Evans' attorney, Joseph Cheshire, said, "I am very comfortable that the charges will be dismissed and these boys will be completely exonerated."
Evans, 24, of Bethesda, Md., graduated the day before he was indicted in May.
Duke temporarily suspended sophomores Finnerty and Seligmann in the wake of their arrest. Both were invited to return to campus, but neither has accepted. John Danowski, the former coach at Hofstra who took over the Duke program last summer, has also said that both are welcome to continue their lacrosse careers with the Blue Devils.
Danowski said he had moved the team's afternoon practice to Wednesday night so his players could attend a planned defense news conference with their former teammates.