Small Business Minister Nick Sherry is expected to step down from the federal ministry in an announcement on his political future in Canberra on Monday.
Recent media reports have said Senator Sherry is intending to step down for personal reasons, giving Prime Minister Julia Gillard a chance to reshuffle the ministry.
The Tasmanian senator will hold a press conference at 0900 AEDT in Canberra.
There's speculation Ms Gillard will announce several changes to cabinet on Monday.
The changes are expected to reward the backers of Ms Gillard in her rise to the prime ministership in June 2010.
Former prime minister Kevin Rudd is set to remain as foreign affairs minister.
Assistant Treasurer Bill Shorten, one of Ms Gillard's backers in the coup against Mr Rudd, is tipped to become workplace relations minister and join cabinet, while Health Minister Nicola Roxon is expected to become attorney-general.
Current Workplace Relations Minister Chris Evans is set to remain in cabinet due to his role as government leader in the Senate.
Other reported changes include offering Industry Minister Kim Carr, who is now in cabinet, a junior ministry and offering Attorney-General Robert McClelland a new portfolio related to homeland security.
Human Services Minister Tanya Plibersek, Defence Materiel Minister Jason Clare and Sports Minister Mark Arbib are reported to have been promoted in the reshuffle.
Treasurer Wayne Swan and Immigration Minister Chris Bowen are expected to retain their portfolios.
The prime minister's office on Monday would not comment on the makeup or timing of the reshuffle.
Labor powerbroker Graham Richardson said the reshuffle was mainly about giving the government a new look.
"Look at that Nielsen poll today. It's not very good for them. They still have a long way to go before they can challenge Abbott at the next election," he told the Seven Network.
"I think it's really about saying `look here we are, we're still trying'."
Mr Richardson said Mr Shorten was the most likely candidate for workplace relations.
"I don't think Chris Evans is really up to that job and of course Shorten, given his union background, has the expertise," he said.
"I think he is the government's best communicator by a long, long way.
"So he deserves it; he should've been promoted a lot earlier."
Mr Richardson said there was little chance Mr Rudd would be moved.
"Of course he's going to stay. If you move him there's a war and I don't think (Julia Gillard) can afford a war," he added.
"Her leadership would be in some strife, not because he can beat her but because he could continue to undermine her."
Mr Richardson said Ms Roxon would be moved from health because it was time to move Mr McLelland and there were not many people who could take on the portfolio.
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