The Indianapolis Star said Pagano has been told he can come back to work as long as he feels able to do so.
Pagano was diagnosed with acute promyelocytic leukemia in September and has been undergoing chemotherapy treatments. Pagano said in November he had been told he was in remission.
Offensive coordinator Bruce Arians has served as interim head coach in Pagano's absence and under Arians' guidance the Colts have gone 8-3.
Indianapolis, which meets Kansas City on Sunday in the next-to-last regular-season game of the year, has a 9-5 record and a win this week would wrap up a wild-card playoff berth.
There was no word from the Colts as to whether Pagano would return to his duties for the Kansas City game.
Indianapolis players, however, are anxious to have him back whenever he makes his first game appearance.
"It would mean the world to us," linebacker Robert Mathis said in a statement posted on the team's website. "He's not fighting it alone. We are here, hearts, minds and souls are with him."