Northern Ireland Secretary Chris Heaton-Harris is set to announce that the UK government intends to extend the deadline for calling a fresh Assembly election, Sky News understands.
Mr Heaton-Harris is expected to extend the current 19 January deadline by six weeks, with an option to extend it by a further six weeks if necessary.
The move gives parties in Northern Ireland more time to break the stalemate at Stormont.
Cutting the pay of Assembly members while Stormont remains in deadlock is also likely to be proposed.
The Northern Ireland secretary is set to give a statement in the House of Commons later on Wednesday to announce his plans.
Sunak to face PMQs grilling after minister resigns – Politics latest
The moves will require legislation to be laid and passed at Westminster.
Northern Ireland: Why is there still no assembly and what does Brexit have to do with it?
Rishi Sunak: How big is the task ahead?
Sunak must deal with Northern Ireland Protocol to restore Stormont, DUP warns
The deadline for the Northern Ireland parties to form a fresh power sharing executive ran out on 28 October.
The current law states that Mr Heaton-Harris is obliged to call a fresh election within 12 weeks of the deadline passing – which would be 19 January.
A Democratic Unionist Party boycott of the devolved institutions, in protest at Brexit’s Northern Ireland Protocol (NIP), has prevented an administration being formed since the May election earlier this year.
The protocol was aimed at avoiding a hard border with Ireland but has created economic barriers on the movement of goods between Great Britain and Northern Ireland, causing resentment and anger among many unionists and loyalists.
The DUP has refused to return to Stormont until decisive action is taken over the treaty.
Last week, the Northern Ireland secretary confirmed that a Stormont election will not be held in December, saying he had listened to “sincere concerns” across the region about the impact and cost of a fresh poll at this time.