Brightstar, which handles trade-ins for AT&T and T-Mobile, will run the exchange program. Apple has not yet publicly announced the plan but is expected to announce soon as it ramps up for the Worldwide Developers Conference.
Ahead of the conference, Apple is rumored to launch an Internet radio service with Sony after a long-awaited agreement. Apple is also expected to announce an overhaul of the phones' operating system for iOS7 and integration with more social sharing sites.
Together, the trade-in and lure of new technology is expected to push Apple's growth despite a slow quarter.
"This will help them sell more phones, because it will lower the consumer's out-of-pocket expense," analyst Roger Entner said.
Users are able to get up to $200 for working iPhone 4s and 4Ss from carriers including AT&T, which would cover the cost of the phone with an upgrade. With an in-house program, Apple can net income on new phones and compete with the growing refurbished iPhone market in developing markets.
Apple's interest in this program comes after being surpassed by Samsung as best-selling smartphone brand and a lull in growth.
Apple started its Reuse and Recycle program, which offers up to $200 for old iPhones, in October 2011. That program is online-only, though, and requires owners to mail in their gadgets. Once received, the trader would be mailed an Apple gift card.
iPhone owners would be able get cash for their old device immediately with the new program.