Android Authority cites an anonymous source at Asus claiming that the two companies are collaborating on a quad-core slate.
The insider did not reveal any further details of the product's hardware specs, but allegedly claimed that it will arrive in June, sparking rumours that it could be unveiled at Google's annual I/O developer conference.
Earlier rumours suggest that the Nexus 7 tablet will sport a Tegra-based MeMO 3270T processor with the next generation Android Jelly Bean operating system pre-installed.
The 7-inch slate is expected to bring competition to Kindle Fire tablet at the budget end of the market. Amazon's device was previously touted as the iPad's closest competitor, though recent sales figures suggest a relative slump in sales.
Google I/O 2012 takes place between June 27 and June 29 at Moscone Centre, San Francisco.