Daewoo Shipbuilding and Marine Engineering (DSME) may be selected for the $1.08bn Indonesian submarine project.
Upon selection, the Korean shipbuilder will sell three 1,200t 209 Class submarines to Indonesia surpassing competitors from Germany, France and Russia to win the contract.
The Chosun Ilbo quoted a senior government official as saying Daewoo would be selected for the project.
"There still are some more processes to follow, but the deal will be struck, unless something comes up," the official added.
The 64.4m-long 209 Class South Korean submarines has a submerged speed of 22.5kt and can be armed with 28 mines.