A high-ranking source in the Commission told DPA that preparations for the suit should be complete by Thursday morning, after which the Commission will make the decision official.
The Commission suspects that German authorities did not sufficiently investigate the practises of carmaker Volkswagen, which US environmental authorities last year revealed had engaged in a massive cheating practise on emissions from its diesel engines.
Volkswagen has been engulfed in a global scandal since it was revealed it had installed software into 11 million diesel engines worldwide that intentionally skewed emissions values during testing.
If Germany is found to have failed in its duty to supervise the company, that could constitute a breach of EU law.
The Commission says the German response to its requests for information has been inadequate.
Transport Minister Alexander Dobrindt has long argued that EU regulations on car emissions are at fault, claiming they are not precise enough. He has called for them to be tightened.
Since the scandal broke, Volkswagen has maintained that the defeat device in its diesel engines was not in breach of EU law.
Greenpeace said it was delighted at news of the impending process.
“The Transport Minister hasn't lifted a finger in his sloppy investigation into the emissions scandal,” Tobias Austrup, transport expert for Greenpeace, said. “It's shameful that real consequences for the emissions scandal have to be imposed from outside Germany."
Gesine Meißner, MEP for the Free Democrats (FDP), said that a process against Germany was long overdue.
“Opening an enquiry is the only logical thing to do, it should have taken place much sooner,” she said.
Elzbieta Bienkowska, the EU's industry commissioner, threatened in September to start legal proceedings against countries which had failed to implement EU regulations on car emissions.
Along with Germany, six other countries also face law suits.