The pair are said to be planning a transatlantic media organisation, incorporating parts of Cowell's existing SyCo label, that will rival Disney.
The partnership would also include the rights to shows including Britain's Got Talent, The X Factor and American Idol, as well as plans to take The X Factor to the US.
"This is going to be a multi-billion dollar international business. This isn't some hobby venture on the side," a source told thelondonpaper.
"They are talking about making profits running into billions as opposed to millions from their joint venture.
"[Green] has been working on this throughout the night in recent weeks, speaking to people in LA on the phone constantly, and smoking 40 a night."
The company, which will be based in London and Los Angeles, will focus on television production and creating new talent show formats, the report claims.
Green founded Topshop in 1964 and has gone on to open over 100 stories, while Kate Moss recently raised the chain's profile further after designed her own clothing range for the high street giant.