Ministers could announce plans to introduce plain packets for cigarettes later this year, reports suggest.
The legislation will be announced during the Queen’s Speech in May, the Guardian said.
The newspaper said the government also plans to ban smoking in cars carrying children.
However, senior Department of Health officials insisted that Health Secretary Jeremy Hunt is yet to make a decision about the move.
In December, Australia became the first country in the world to put all tobacco products in standardised packs.
Cigarettes and other products are all sold in packaging of a standardised colour, with only the brand name and graphic warnings visible.
“We are going to follow what they have done in Australia,” a senior Whitehall source told the Guardian.
“The evidence suggests it is going to deter young smokers. There is going to be legislation.”
In April last year, the government launched a consultation on plans to introduce mandatory standardised packaging for tobacco products.
Health campaigners have welcomed the proposal, saying that b rightly coloured packages are one of the last marketing ploys tobacco companies use to lure people to their products, but opponents claim it would lead to increased smuggling and job losses.
Information generated by the consultation, which closed in August, is still being analysed by health officials.
A Department of Health spokeswoman said: “We have received many thousands of responses to the tobacco packaging consultation. We are currently in the process of carefully collating and analysing all the responses received.
“The government has an open mind on this issue and any decisions to take further action will be taken only after full consideration of the consultation responses, evidence and other relevant information.”
Dr Harpal Kumar, chief executive of Cancer Research UK, said: “We strongly support proposals to introduce plain, standardised packaging of tobacco, and other measures to reduce the harm caused by smoking.
“Introducing standardised packaging would be a huge public health achievement for the government. And despite strong lobbying from the tobacco industry, we know the majority of the public backs plain packs. We urge the Government to move forward with this measure and give it our full backing.
“Pack design is one of the last marketing tools available to the industry. Existing glitzy and colourful packs hold real appeal for young people, reducing the impact of health warnings and often misleading them to believe cigarettes are less harmful than they are.
“We must silence the tobacco industry’s capacity to target children in this way, particularly as 157,000 children still start smoking every year. Plain, standardised packaging won’t stop everyone from smoking - but it will give millions of children one less reason to start.”
Steve Crabb, communications director of the British Lung Foundation said: “This is fantastic news, and a significant acknowledgement that the unacceptable number of people dying from respiratory disease in the UK needs to be tackled through legislation.
“Reducing smoking is one of the biggest things we could do to improve the health of the nation. BLF supporters have been campaigning hard for legislation to ban smoking in cars when children are present and, along with standardised packaging for tobacco products, these measures could make a huge difference to future generations’ lung health.”