The official, confirming the murder charges on condition of anonymity, also said Army Staff Sergeant Robert Bales would be charged with six counts of assault and attempted murder.
The massacre is likely the deadliest war crime of the 10-year-old conflict by a NATO soldier and has further strained already difficult relations between the United States and Afghanistan.
Bales, 38, allegedly walked out of his base in the southern province of Kandahar under cover of darkness March 11 and killed 17 people in two nearby villages, including women and children. He then allegedly burned some of their bodies, returned to his base and surrendered.
The charges raise by one the number of deaths reported immediately after the atrocity, which have deepened a sense of crisis in the NATO-led mission and renewed questions about the effect of protracted ground wars on America's stretched force.
The killings came at an already tense time for US-Afghan ties after the inadvertent burning of Korans by American soldiers triggered deadly anti-US protests, "insider" attacks on NATO troops by Afghan forces and an earlier video that showed US Marines urinating on the bloodied corpses of Taliban militants.
US officials have pledged to hold the gunman to account, and Defense Secretary Leon Panetta has said Bales could face the death penalty if convicted. The soldier's motives remain unknown and investigators are examining if alcohol played a role in the killings.
Initially transferred to a US base in Kuwait, Bales is now at the Fort Leavenworth military prison in Kansas, where he is being held in a solitary cell.
The charges are due to be officially announced Friday, sources close to the investigation said.
Under the US military justice system, prosecutors draft charges to be filed against an accused soldier, then present them to his unit commander, who must then decide whether there is enough evidence to believe a crime was committed.
Bales is then due to appear for an Article 32 preliminary hearing at a still unknown date, when authorities will decide whether to go ahead with a court-martial.
The soldier's lawyer, John Henry Browne, visited his client for the first time on Monday and Tuesday and told reporters that Bales suffered from amnesia.
"He has an early memory of that evening and he has a later memory... but he doesn't have memory of the evening in between," Browne told CBS News, adding that his client dismissed reports that he was drunk at the time of the attacks.
The lawyer said he would not put forward an insanity defense in any proceedings, but could pursue the case on the grounds of "diminished capacity" due to an emotional breakdown.
A decorated veteran who served on three combat tours in Iraq before deploying to Afghanistan in December, Bales suffered a traumatic brain injury during a road accident in Iraq.
Military officers and experts, however, say there is no firm scientific evidence that shows brain injuries cause violent behavior.
Bales' lawyer said last week that his client had recently been under stress, which was heightened when he witnessed a fellow soldier seriously wounded by stepping on a mine.
Bales, who in addition to Browne also has a military lawyer, and his wife reportedly were facing growing financial problems.
Before joining the army, Bales worked as a financial advisor, and news reports have said he owes $1.5 million from a 2003 arbitration ruling in which he was found guilty of securities fraud.
If the defense can convince jurors the attack was not premeditated, the maximum sentence would be life in prison and could include the possibility of parole after 10 years.
The goal is "attacking the level of intent," said Daniel Conway, a military defense attorney who is not involved in the case.
A conviction on premeditated murder can result in the death penalty or life in prison without possible parole.
"It makes a world of difference for his client," Conway told AFP.
But his lawyers are taking a risk by announcing their intentions, Conway said, because investigators will be on alert for any evidence that goes against diminished capacity.
Military juries are also not inclined to put much store in arguments that injuries, post-traumatic stress disorder or financial problems result in diminished capacity for a defendant, he said.