Supported by China, North Korea's closest friend, the draft resolution provides for an arms embargo on Pyongyang and some form of inspection of suspect cargo in and out of North Korea, The Times of London reported.
The council's five permanent members are the United States, Russia, China, Britain and France. Also participating in the draft resolution were Japan and South Korea, North Korea's neighbors.
The draft reached Wednesday-- in the making since North Korea conducted its second nuclear test May 25 in defiance of previous U.N. resolutions -- was expected to be approved by the full 15-member council, the Times said.
"This sanctions resolution, if passed by the Security Council, will bite and bite in a meaningful way," Susan Rice, U.S. ambassador to the United Nations, was quoted as saying.
Xinhua, China's official news agency, said the 34-paragraph draft resolution, which expressed the "gravest concern" over the nuclear test, also provides for a range of punitive measures severely curtailing loans and money transfers to North Korea.
North Korea, which followed up its nuclear test with a number of short-range missile firings and threats against U.S. and South Korean vessels, has said it will regard additional U.N. sanctions as an act of war.
Cargo inspection on ships and planes had been a major hurdle in drafting the resolution. China agreed to go along with it after the language on the inspection was softened, the Times said.
The draft calls on U.N. members "to inspect all cargo to and from (North Korea) if the state concerned has information that provides reasonable grounds to believe the cargo contains prohibited items" such as arms, nuclear technology and missile components. It also calls on member states to inspect suspect ships on the high seas.
A CNN report said North Korea's other recent activities also have raised concerns. It quoted two U.S. Defense Department officials as saying late last month that satellite imagery had spotted "vehicle activity" at a North Korean ballistic missile facility.
The North's Taepodong-2 long-range missile was tested earlier this year, the report said.