The tycoon is expected to reveal plans to step back from his role as chief executive of Frasers Group to become deputy chairman tomorrow, it has been reported.
He will apparently be replaced in the top job by 31-year-old Michael Murray, who is engaged to Mr Ashley's daughter Anna.
Mr Murray is currently head of elevation at the retail group, which also owns House of Fraser and Flannels, and has been tasked with modernising the business and creating a more upmarket image.
However, the report also cited sources saying the famously mercurial retail boss could still change his plans.
Mr Ashley has been one of the high street's most colourful characters since in 1982 founding Sports Direct – which took over Edinburgh’s Jenners in 2005. He has rapidly grown his retail operation in recent years, snapping up a number of distressed British brands including Evans Cycles, Jack Wills and Game.
The group is now worth around £3 billion and operates almost 1,000 shops.
Mr Ashley was previously executive deputy chairman of the retail group – which changed its name from Sports Direct International to Frasers Group last year – until 2016, when long-serving chief executive Dave Forsey resigned.
It is expected to unveil "upbeat" figures tomorrow amid hopes its sales will have rebounded strongly after the reopening of high-street stores.
In April, the retail giant was cautious in its outlook despite the reopening of retailers across the UK. The company warned it could take a £200 million hit from the impact of pandemic restrictions following the third national lockdown.
However, shareholders will be hopeful of a strong recovery message from the group when it delivers its full-year trading figures.
In May, Mr Ashley showed his confidence in the group's post-Covid future by snapping up £60m more shares in the company.
The group reports significant online sales through Sports Direct but continues to operate a large and sprawling retail portfolio that will have been significantly affected by restrictions.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "After a surge of sales in April, clothes shopping appears to have fallen out of fashion again in May and June, according to the ONS, which also doesn't bode too well for the performance of House of Fraser and Flannels, with sales in department stores particularly weak.
"However, football fever should have kept demand more buoyant at Sports Direct, with young sports fans buying kit and equipment to try and follow in the footsteps of their soccer heroes."
Analysts have also highlighted strong growth in the athleisure sector over the past year amid a jump in fitness activity during the pandemic.
Jonathan Pritchard, analyst at Peel Hunt, said: "I think that the athleisure trend will prove to be something that carries all boats.
"Whether the better trading post-restart is enough to boost the reported full-year 2021 number or just gives them a good start to full-year 2021 remains to be seen but there is no doubt that the trends will continue and Sports Direct, to a lesser degree than JD, will take advantage.”