Although Mueller's contract is not officially scheduled to terminate until 2020, Volkswagen said that the 64-year-old executive had "signaled his principal willingness" to help carry overhaul the company's management.
Karlheinz Blessing, member of the Board of Management of Volkswagen AG with responsibility for "Human Resources and Organization" attends Volkswagen AG annual news conference in Wolfsburg, Germany, April 28, 2016. After serving a number of different positions with in the company, including Audi and Lamborghini product coordinator and Porsche CEO, he assumed his current position at the helm of the overall Volkswagen Group in 2015 when he was put in the position a week after the company admitted to cheating U.S. diesel emissions tests.
Volkswagen said in a short statement that board of directors Chairman Hans Dieter Poetsch was in discussions with top managers about their duties and that the result was "currently open".
German newspaper Handelsblatt first reported that Diess would replace Mueller.
German carmaker Volkswagen is considering replacing its CEO Matthias Muller in a management reshuffle.
In a statement released today, the company said only that it was considering "personnel changes in the board of management [which] could also include a change in the position of the chairman of the board of management".
Muller was named CEO in 2015 after overseeing VW's Porsche brand, and has somehow led the automaker to record sales and profits as it dealt with an emissions scandal.
The supervisory board will vote on the change in top leadership at a meeting on Friday, according to people familiar with the matter, who asked not to be identified speaking ahead of an official announcement.
Shares in Volkswagen, which also owns the Bentley, Bugatti, Lamborghini, Skoda, Audi and Porsche brands, jumped on the news, and were up 4.3 percent at 171.24 euros at 1520 GMT.
As part of the streamlining plan, Volkswagen tried to sell motorbike manufacturer Ducati previous year, but failed in the face of opposition from labour union leaders.
The issue with restructuring VW lies with a tug a war between interested parties including the controlling families, stakeholders, and unions.
VW shares got an additional boost from the reports that it is planning on replacing Mueller.
"We see no better alternative to Matthias Mueller to make the company fit for the future".