Citing people familiar with the matter, Bloomberg reports the seat left vacant by former CEO Steve Ballmer will be filled from within by Nadella, the Redmond, Wash., tech giant's head of enterprise and cloud operations.
While plans are not finished, Nadella was revealed as a candidate at the end of 2013 and sources claim he is one of the stronger picks to come out of Redmond's stable.
If Nadella is named CEO, it will end a months-long search headed by lead independent director John Thompson. A number of high-profile candidates were passed over for the role, including Ericsson CEO Hans Vestberg, Nokia CEO Stephen Elop and Ford CEO Alan Mulally. Considered one of the top outside picks, Mulally ultimately removed himself from the running.
In addition to the CEO nomination, Microsoft's board is also considering a replacement for co-founder Gates, who is currently acting as company chairman. Details are scarce, but the publication mentions independent director John Thompson as a possible candidate for the role.
Gates may not be completely locked out Microsoft, and he could remain active in the company as long as the board and as-yet-unannounced CEO deem it appropriate, sources said.