The multiyear proposal calls for spending about half the total in the administration's remaining five months in office and recommending that the next president and his team continue financing the project when they take over in January, a senior official said.
Both the Democratic and Republican contenders for November's presidential elections, Barack Obama and John McCain, have expressed support for Georgia's embattled government in the face of the Russian invasion after Georgia moved to reclaim a breakaway province.
The package, some of which will require congressional approval, will be a substantial U.S. investment in Georgia but is only half the $2 billion a year in aid that Washington provides its closest Middle East ally, Israel.
The White House and State Department intend to jointly announce the aid package Wednesday afternoon after a fact-finding and assessment mission to Georgia by Reuben Jeffrey, a senior U.S. diplomat who returned from the country last week, the official told the AP.
Jeffrey has recommended that aid be sped to Georgia to help rebuild its economy and infrastracture that was destroyed by Russian tanks, troops and airstrikes, according to the official, who spoke on condition of anonymity ahead of the announcement.
Specific details of the aid were still being worked out, but large chunks will go toward fixing transportation, utility and other essential facilities damaged in the fighting, the official said.
The aid is aimed at showing concrete U.S. support for Georgian President Mikhail Saakhashvili and his government and is to be announced shortly before Vice President Dick Cheney visits Georgia this week.
It follows increasingly harsh criticism from Bush, Cheney, Secretary of State Condoleezza Rice and other top administration officials of Russia's actions against Georgia and its refusal thus far to comply with the terms of a cease-fire brokered by the French and the European Union.
However, the aid will not be accompanied by threatened punitive measures against Russia that still are being considered and which the administration would like to take in concert with European nations, the official said.
European Union leaders threatened on Monday to delay talks with Moscow on a political and economic agreement unless Russia pulls its troops back from positions in Georgia that they occupied in early August in a dispute over the separatist areas of Abkhazia and South Ossetia.
On Tuesday, Russian Prime Minister Vladimir Putin said that Russia will respond calmly to an increase in NATO ships in the Black Sea in the aftermath of the short war with Georgia, but promised that "there will be an answer."
Russia has repeatedly complained that NATO has too many ships in the Black Sea. Foreign Ministry official Andrei Nesterenko said Tuesday that currently there are two U.S., one Polish, one Spanish and one German ship there.
Russian officials say the United States could have delivered weapons to Georgia under the guise of humanitarian aid.
"We don't understand what American ships are doing on the Georgian shores, but this is a question of taste, it's a decision by our American colleagues," he reportedly said. "The second question is why the humanitarian aid is being delivered on naval vessels armed with the newest rocket systems."
On Aug. 7, Georgian forces attacked South Ossetia, hoping to retake the province, which broke away from Georgia in the early 1990s. Russian forces repelled the offensive and pushed into Georgia.
Both sides signed the cease-fire in mid-August, but Russia has ignored its requirement for all forces to return to prewar positions. Moscow insists the cease-fire accord allows Russian checkpoints in security zones of up to four miles into Georgian territory.
Russia has now recognized the independence of the two regions, drawing condemnation but little else from the United States and Europe, which have found only limited leverage with Moscow.