The Sydney Morning Herald (SMH) said 36-year-old MacGill has consented to surgery to prolong his Test playing career.
But the newspaper said in doing so, MacGill would surrender his Test position to rival Brad Hogg, allowing the West Australian wrist-spinner the opportunity to cement his place in the Test side over the course of the December-January four-Test series against India.
The SMH said if all went to plan, MacGill would be available for the final rounds of the domestic Sheffield Shield competition to prove his fitness to Australian selectors before the tour of Pakistan next March.
But MacGill has already undergone surgery on the knee this season and he faces the risk that he might not regain fitness in time for the Pakistan tour.
Another risk for MacGill was Hogg performing strongly in his place against India, which would make MacGill's Test return problematic given his age, the SMH said.
MacGill struggled in last week's second Hobart Test against Sri Lanka, and finished the two-match series with the bowling figures of 5-326.
Hogg has been in strong form for Western Australia this season, claiming 13 wickets at 23.38 from three matches.
He also completed a successful one-day tour of India last month, taking 11 wickets from seven matches against a batting line-up similar to that which will arrive in Australia next month.
MacGill's friend and club teammate Greg Matthews told the SMH: "I know what's happening, but it's not my place to say."
The newspaper said MacGill did not return its calls on Monday.
MacGill will play no part in the table-topping Sheffield Shield game with Victoria, beginning on Friday, and Cricket NSW said in a statement Monday that MacGill was hopeful of playing in NSW's following four-day match, against Queensland at the Gabba.