India slumped to their third consecutive loss in the four-match series in Australia, with only next week's test in Adelaide left for them to restore some pride.
Laxman has managed just one half-century in six innings in the series, and newspapers reported on Sunday he would be axed if he did not retire.
"Laxman will retire at the end of the ongoing test series in Australia," an unnamed official of the Indian cricket board (BCCI) was quoted as saying by the Indian Express newspaper.
"He is 37 and India's next test series is still at least six months away. Plus his form has dropped significantly and his fitness, especially a troublesome back, is hampering him."
Laxman would make way for a younger player when India travelled to Adelaide, bidding to avert a second successive 4-0 whitewash overseas, the report said.
"We need to plan for the future after the poor show in England and now in Australia. Youngsters need to be given a long run now.
"Laxman has been one of our finest batsmen but he has run out of time as he has failed to make it count against Australia, a team he has dominated at his best," another BCCI official was quoted as saying.
India captain Mahendra Singh Dhoni was unaware of the development.
"As of now, there's nothing I know officially," Dhoni said at Perth. "I don't know where this came from, until Laxman comes to me and says something, I can't comment," he added.
Of India's senior batsmen, only 38-year-old Sachin Tendulkar has looked good in Australia, twice coming close to scoring his 100th international century.
Rahul Dravid (39) continues to struggle, managing just one half century in six innings as Australia's bowlers ripped through his famous defence.
Former player Anshuman Gaekwad was among those who advocated phasing out the seniors players to avoid a transitional crisis.
"Sachin still has the class, Rahul is very hard working but I am not sure how long Laxman will be able to continue," Gaekwad recently told Reuters.
Source : Reuters
