Development sources have told IGN that content can be transferred to a six-inch screen, comparing it to a "miniature television".
As well as touch-screen input, the controller will feature analogue sticks, triggers and a d-pad, not unlike a GameCube controller.
It was added that Nintendo will formally unveil the console, codenamed Project Cafe, at E3 with content from first and third parties. It is unknown whether the device will be playable at the event.
Last week multiple sources revealed that Nintendo is going to release its next home console in late 2012.
Later rumours suggested that the device will support Blu-ray as a disc format, and that its motion control functionality will be better than the PlayStation Move.
It has also been speculated that the Wii will have its US retail price cut from $199 (£122) to $150 (£92) next month.