According to a report on Channel Nine, Warne, who has been instrumental in the World Champions regaining the Ashes, will make the announcement tomorrow.
Warne, who will be aiming for his 700th Test wicket in the fourth match to be played in Melbourne, is reportedly convinced that it would be the ideal time to end his career in the longer version of the game after having already said goodbye to ODIs.
The Aussie spin king is likely to become a commentator after his retirement.
McGrath, meanwhile, may continue his One-day career and play in next year's World Cup in West Indies before retiring completely, according to the Sydney Morning Hearld.
Cricket Australia spokesman Peter Young said the matter was for the players to decide and CA had no information about the speculated retirements.
''Those two players are the masters of their own destiny and the owners of their own futures and when they announce decisions on their futures is up to them,'' he said.
If the duo retires, it will come close on the heels of Damien Martyn's sudden goodbye to the game and selector Merv Hughes has admitted that the gaping holes left by the retirements of senior players would be very hard to fill.
Hughes said CA would try to prevent the ageing stars like Warne, McGrath and Adam Gilchrist from retiring at the same time.
However, he also said the selectors were not exactly concerned about the situation right now and will wait for the things to unfold before revealing their plan of action.
''You pick the side to win today with a view to the future. Yes we have got some (older) players in that side ... and it would be irresponsible to let such quality players like that go at the one time,'' Hughes was quoted by the Australian Associated Press as saying.
''We haven't really discussed it, sat down and nutted it out,'' he added.
Hughes said player were free to decide their future but admitted that en masse retirements would hurt the team badly.
''When you talk of those five names, they've been the backbone of the Australian team for 10-15 years. They are fantastic players,'' he said.