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 brightly 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.
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: "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."
Prime Minister David Cameron's official spokesman said the Department of Health was still considering responses to a consultation on plain packaging, but there were "no plans" to ban smoking in cars in the presence of children.
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