UTV understands DUP MP Sir Jeffrey Donaldson will announce on Monday that he will be standing as a candidate for the party's leadership.
The move will trigger the first ever election in the party's 50-year history.
Sir Jeffrey will be challenging his Lagan Valley colleague Edwin Poots MLA who announced last week that he intends to stand for the top job.
It comes after Arlene Foster announced she'd be stepping down as First Minister and DUP leader.
Mr Poots has made clear that if he wins, he does not intend to take up the position of First Minister - which would mark the first time the roles have been split within the DUP.
On Saturday, Edwin Poots' campaign manager said he has been endorsed by the majority of the DUP's MPs and MLAs to take over as party leader.
The DUP MLA Paul Frew tweeted he would "take nothing for granted" and added he is "very grateful for the support Edwin has received from colleagues".
The outgoing DUP leader will step down from that role on 28 May, and as Stormont First Minister at the end of June.
A small electorate, comprising just the party's MLAs and MPs, will decide the leadership contest.
If Sir Jeffrey does confirm his challenge on Monday it will coincide with the date viewed by many historians as the centenary of the creation of Northern Ireland.
On Sunday it emerged that Mr Poots would not take on the First Minister's job if he was elected DUP leader, instead appointing an Assembly colleague to the role as he concentrates on the leadership.
If Sir Jeffrey won the leadership and remained as an MP at Westminster he would not be able take up the First Minister's job.