It is understood that BBC Worldwide would supply the branding and content for the venture.
The two companies are expected to announce an agreement later today, when Google chief executive Eric Schmidt visits the World Economic Forum in Davos.
The deal could also stretch to the supply of content for Google Video, which offers pay-per-view and pay-per-download options. It is not yet clear how Google plans to go forward with its two online video brands.
2006 was a banner year for YouTube. The video sharing site launched in February 2005 and had claimed over 40 percent of the online video market share by May.
By October, YouTube was logging more than 100 million video downloads per day and by the end of the year had become the sixth most popular site on the internet, according to Alexa Web Search.
Google agreed to purchase the video sharing site in October for $1.65bn in stock.
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