The Chronicle reported the indictment is expected within two weeks, citing lawyers close to the case.
The Justice Department's Enron Task Force has been investigating Lay, the company's former chairman, for 2 1/2 years, but the Chronicle said the probe has recently picked up steam.
Witnesses about Lay have appeared before the Enron grand jury in increasing numbers in the past few weeks. Prosecutors have also been separately interviewing other witnesses and shoring up details in a case against Lay.
Government lawyers have made little known about their plans, and lawyers for witnesses say prosecutors could postpone the final presentation of the case.
But the grand jury in Houston has already heard five days of testimony this month that focused on Lay. The witnesses have included Lay's Chief of Staff Steven Kean and ex-Enron General Counsel Jim Derrick.