Citing people with "direct knowledge of the matter", Bloomberg said the US technology giant will unveil the changes by "year's end".
The news agency's sources apparently wanted to remain anonymous because the iTunes plans are not public.
But they claimed that Apple will work to more closely integrate the iCloud remote storage service into iTunes, enabling users to more seamlessly access and organise their music, videos and other files across a range of devices.
Apple's plans also include new features for sharing music, the sources said.
Since it was released in 2003, iTunes has grown to become the biggest online entertainment store in the world, offering 28 million songs and 45,000 movies, along with 650,000 apps for the iPhone, iPad and iPod Touch.
The platform has proved a great money-spinner for Apple, generating nearly $1.9 billion in revenue last quarter alone, while also providing a great income for third-party developers.
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Another major benefit of the store, though, is that it enables Apple to tie consumers into its family of products and devices, creating greater loyalty to the brand.
Bloomberg's report says that the iTunes overhaul is intended to help people more easily manage and access their existing content, as well as assist them in discovering new material.
A major area of change will be in the sharing of music, as Apple attempts to keep pace with the ever-growing Spotify platform.
Apple is said to be negotiating with the major record labels for new rights deals that would allow users to listen to a song sent to them from a friend for free.
The company would tie this to existing social networks, after recently announcing closer integration of Facebook into its iOS mobile operating system, joining the already fully-integrated Twitter.
Apple has been rumoured to be launching its own music subscription service, which would compete with Spotify by offering customers streaming access to millions of songs for a monthly fee.
However, the sources said that such a service would be unlikely.
An Apple spokesman declined to comment on the report.