Top officials will reportedly convene in Washington for the White House announcement, including, potentially, California Governor Arnold Schwarzenegger. Governor Jennifer Granholm (D-MI), a potential Supreme Court nominee, is also rumored to be attending the announcement.
A person with knowledge of the negotiations, tells CBS News' Chief White House Correspondent Chip Reid that the new policy includes "harmonized standards."
The president and carmakers hope the plan will add stability to struggling auto companies.
The Wall Street Journal is also reporting that the the new standards will call for raising the overall fuel economy of cars to thirty five miles per gallon by 2016 -- four years faster than federal law requires.
This announcement also marks the first time greenhouse gasses are linked to vehicle emissions. California, thirteen other states and the District of Columbia have lobbied to be allowed to enact higher standards than the federal government requires.
"The administration will bill the tailpipe-emissions announcement as historic, because it avoids a patchwork of standards and harmonizes so many stakeholders, including automakers, state governments, the Department of Transportation and the Environmental Protection Agency," Allen reports.
The story adds that President Obama has garnered support from both state governments and major carmakers, including Ford, Chrysler, GM and BMW, in "secret" conversations.
Early in his administration, the president charged the Department of Transportation to draft higher fuel efficiency standards for car manufacturers.
The new fuel standards, also called CAFÉ or Corporate Average Fuel Economy standards, are limits placed on carmakers to standardize the number of miles per gallon achieved by their vehicles.