Prince Harry is set to spend six months on secondment with the Australian Army.
The Department of Defence, British Army and Clarence House in London are discussing where and when the deployment would occur, and whether Prince Harry would serve on the frontline, News Ltd reports.
The 28-year-old Apache attack helicopter co-pilot could be formally embedded with an Australian army unit or make an extended visit as an observer under the plan.
He has reportedly said he is keen to serve alongside Australian soldiers.
Prince Harry, who is a captain in the Cavalry Regiment, has already had two deployments in Afghanistan.
The prince is unlikely to get another turn flying in Afghanistan again before all foreign combat troops withdraw by the end of 2014.