The leader of Ivory Coast's New Forces rebels, Guillaume Soro, is to be named as prime minister, his group says.
Mr Soro has previously spoken of his hatred for the president
Mediators from Burkina Faso say an agreement was signed on Monday but President Laurent Gbagbo has not yet confirmed the reports.
Mr Soro, 35, and his bitter enemy President Gbagbo signed a peace deal in Burkina Faso earlier this month.
Ivory Coast has been in crisis since the New Forces seized the north of the country in September 2002.
BBC Ivory Coast correspondent James Copnall says that if Mr Soro is named prime minister, it would mark an extraordinary about-turn.
The rebel leader has frequently spoken of his hatred of President Gbagbo, a man he took up arms to overthrow.
There are also doubts about whether the military wing of the New Forces, which is often more hard-line than Mr Soro, will accept the decision, our reporter says.
'War is over'
"The two parties signed the document yesterday [Monday], and now it remains only for Gbagbo to sign the decree appointing Guillaume Soro prime minister," Burkina Faso Security Minister Djibril Bassolet told the AFP news agency.
1972: Born to poor farmers in north
1997: Imprisoned for leading student protests
2000: Asked to head youth wing of Gbagbo's party
2002: Named rebel leader
Mr Gbagbo's spokesman refused to comment but the president did say on national television that a new government would be in place within a week at the latest.
"I can assure you the war is over," he said.
The formation of a new government was part of the peace deal Mr Soro and President Gbagbo signed at the beginning of the month.
Current Prime Minister Charles Konan Banny was appointed by the international community at the end of 2005.
He was meant to have extensive powers but President Gbagbo made it clear he would not relinquish his authority to the prime minister.
On Monday Mr Banny said he was prepared to sacrifice his position if it was in the interests of the nation.
Our reporter says the latest peace deal is seen as Ivory Coast's best chance yet of coming out of its prolonged crisis.
But the personal rivalry between President Gbagbo and Mr Soro, and their failure to implement past accords, mean Ivorians are not overly optimistic this time round, he says.