Shares in tobacco giant Altria Group, which owns a 35% stake in the vaping products maker, fell 8.5% following the report. The decision could come as early as Wednesday, the report said.
Juul has faced heightened scrutiny from regulators, lawmakers and state attorneys general over the appeal of its nicotine products to teenagers. Under pressure, the company in late 2019 had halted U.S. sales of several flavors.
The FDA declined to comment on the report, while Altria and Juul did not respond to requests for comment from Reuters.
"This clearly comes as a surprise to the market ... we would expect that Juul would appeal the decision, and remain on the market through that process, which would likely take a year or more," Cowen analyst Vivien Azer said.
The looming verdict comes nearly two years after Juul had applied for approval to keep selling e-cigarettes in the country.
The FDA's review of the applications was based on whether the e-cigarettes are effective in getting smokers to quit and, if so, whether the benefits to smokers outweigh the health damage to new users, including teenagers.
In October, the FDA had allowed Juul rival British American Tobacco Plc to market its Vuse Solo e-cigarettes and tobacco-flavored pods, the first-ever vapor product to get clearance from the health regulator.
The estimated fair value of Altria's investment in Juul was $1.6 billion as of March end, a fraction of the $12.8 billion it paid in 2018, as a crackdown on vaping has upended the once fast-growing industry.
"The investment in Juul was always a mistake, the company paying top dollar for a business which was already clearly (on) the wrong side of the regulators," said Rae Maile, analyst at Panmure Gordon.