The move follows years of pressure from gay rights groups for Obama to act on his own while a broader employment non-discrimination measure languishes on Capitol Hill. The Senate passed the legislation last year but the bill stalled in the Republican-led House and there is little sign that lawmakers will take it up in an election year.
There is currently no federal law that explicitly bans workplace discrimination on the basis of sexual orientation or gender identity. While Obama does not have the authority to extend that protection to all Americans, he can take unilateral action that impacts federal contractors, which make up nearly one-quarter of the U.S. workforce.
Obama has used this tactic before, signing executive orders that raise the minimum wage for federal contractors and expanding the number of workers who would be eligible for overtime pay. White House officials have cast the approach as part of the president's effort to work around a Congress that continues to be mired in gridlock.
But those moves increased the frustration among gay rights supporters who have long pressed Obama to extend workplace discrimination protections to gay, lesbian, bisexual and transgender individuals working for federal contractors. The White House publicly offered little explanation as to why the president moved forward on the wage-related orders but not the anti-discrimination measure.
The official would not say when Obama planned to sign the order, only that the president had asked his staff to prepare a measure for his signature. The official insisted on anonymity, lacking authorization to discuss the president's decision by name.
The official said the White House wanted to preview the president's upcoming action because of the "intense interest" in the executive order.
The announcement comes one day before Obama travels to New York for the Democratic National Committee's annual gay and lesbian fundraiser. LGBT donors have used previous fundraisers to press Obama on this issue.
Obama's plan to sign the order was welcomed by gay rights groups. Rea Carey, the executive director of the National Gay and Lesbian Task Force, called it a "major step forward."
"Through his actions, the president has demonstrated again his commitment to ending discrimination," Carey said.