President Barack Obama was expected to announce that he's appointing Central Intelligence Agency Director Leon Panetta to lead the Department of Defense, and Gen. David Petraeus, who currently leads the Afghan occupation, to replace him.
News of the major shift in the administration comes from unnamed sources close to the president, according to The Wall Street Journal. The changes were said to be in the works for later this summer.
Current Defense Secretary Robert Gates has said he would leave this year.
Officials who spoke to the Journal said that Lt. Gen. John Allen would assume control of the Afghan occupation.
Panetta was former president Bill Clinton's chief of staff from 1994 to 1997, following a 16-year career as a lawmaker from California. His expertise in the House of Represenatives and in the Clinton administration was in budgets and finance, and he was widely believed to be taking the post at Defense to oversee the implementation of President Obama's budget cuts.
The report said the president's announcement will come Thursday.