According to TMZ, the writer and sometime actor has already agreed to appear on the show and will be partnered with a female professional dancer.
Bono, the son of singer Cher and the late Sonny Bono, underwent successful gender reassignment surgery in 2010 to become a man.
Bono recently told Piers Morgan that he plans to marry partner Jennifer Elia as soon as possible.
Other stars rumoured for the show's new season include David Arquette, Nicole 'Snooki' Polizzi, Rob Kardashian and Dina Lohan.
The full cast lineup for the new season of Dancing with the Stars is due to be announced on Monday.
Dancing with the Stars will return on ABC on September 19.