Her reported decision comes after days of speculation that Clinton, who spent months in an often bitter battle with Obama for the Democratic presidential nomination before conceding in June, had been offered the role.
On Friday Philippe Reines, a spokesman for Clinton, denied that she had accepted the job offer, although he told AP that the discussions were "very much on track.''
Vetting process
Last week Clinton flew to Chicago, Illinois, to hold talks with Obama in a move widely thought to have been about a possible nomination for the secretary of state role.
Al Jazeera's Anand Naidoo in Washington DC says sources report that the news is not "100 per cent" confirmed and that the news could have been leaked by Clinton supporters keen to move her nomination for the role further on.
Obama's team has also not confirmed any of the reports.
Democratic Party sources have recently said that Clinton was on track to be nominated for the post, with an official announcement expected after the November 27 Thanksgiving holiday in the US.
Members of Obama's transitional team ahead of his January 20 inauguration have also spent the past few days vetting Clinton and her husband, Bill Clinton, the former US president.
This is to ensure that the former US leader's business interests and donors to his charitable foundation would not cause any possible conflict of interest if his wife took on the role.
Analysts say Clinton's experience and global visibility are assets to the role, one of the most prominent in any US administration.
However some have questioned her harsh words over Iran and its nuclear programme and firm support of Israel as being evidence of a more hawkish stance towards world politics.
Economic team
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Richardson is reportedly being considered
as commerce secretary [GALLO/GETTY] |
In addition, NBC News said Obama is widely expected to ask Bill Richardson, governor of New Mexico and one of the US's most prominent Hispanic politicians, to be US secretary of commerce.
Richardson was an early supporter of Obama after dropping his own bid to win the Democratic party's presidential nomination.
Timothy Geithner, the president of the New York Federal Reserve Bank, is also expected to be nominated to the post of US treasury secretary, NBC also reported.
Geithner was long considered a top contender for the post, along with Lawrence, or "Larry" Summers, a former treasury secretary during the presidency of Bill Clinton.
A senior Democrat told Reuters news agency on Friday that Obama wanted Geithner for the treasury job, but had yet to make a offer, and said Summers was "off the list" for consideration.
US stocks soared on the reports, pushing major indices up more than six per cent, with the Dow Jones Industrial Average closing above 8,000, up more than 500 points, despite neither of the posts being confirmed by Obama's team.
NBC said that Obama is expected to formally announce his economic team on Monday in an effort to calm markets after months of financial turmoil.