The new machine will be less than 8 inches across the diagonal - considerably smaller than the current 9.7-inch model.
It will also be cheaper, to compete with rivals such as Google's £159 Nexus 7.
The unnamed sources in Apple's supply chain said that the launch is 'very near'.
Rumors were reported by Bloomberg and the Wall Street Journal, quoting several unnamed sources within Apple's supply chain.
Earlier reports by Far Eastern technology blogs had also hinted that a launch was imminent.
The late Apple co-founder Steve Jobs was vehemently against a smaller iPad, but analysts have long predicted that a machine would appear in the second half of this year.
Sterne Agee analyst Shaw Wu predicts that the move would be a devastating blow for Android competitors.
'It would be the competitors’ worst nightmare,' Wu said. 'The ball is in Apple’s court.'
The iPad Mini would show that Apple is prepared to break away from former chief exec Steve Jobs' deeply-held mantras.
The Apple leader, who passed away last October, publicly derided the smaller tablet model, in particular the seven-inch form-factor, which is becoming a standard for a smaller tablet.
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