Sony's next home console will enter production by the end of this year for release in 2012, says DigiTimes.
PlayStation 3 component makers Foxconn and Pegatron Technology have been contracted to produce 20 million units by the end of next year.
PlayStation 4 will also feature a control scheme which focuses on body movement, much like Microsoft's Kinect.
Earlier this year, Sony said it was not "even debating" a fourth PlayStation since the PlayStation 3 has a ten-year life cycle.
The next Xbox will be shown by Microsoft at E3 2012, according to a source at Crysis 2 developer Crytek, a claim that was later denied by the firm.
Last week, a report suggested that the PlayStation 3 will be given a price drop next month at German expo Gamescom.