Sources have confirmed that the Eton-educated bishop will be announced as successor to Dr Rowan Williams as early as Friday, after the Crown Nominations Commission put his name forward to Downing Street.
It marks a meteoric rise for the former oil executive who has been a bishop for only a year, but insiders described Welby as "the outstanding candidate".
Last night a spokesman refused to confirm his appointment. But it came a few hours after he pulled out at short notice from a planned appearance on the BBC Radio 4 discussion programme Any Questions due to take place in County Durham on Friday.
He also cut short a retreat with diocesan staff and returned to the capital where it is understood his wife is travelling down to join him tomorrow.
Earlier this week bookmakers stopped taking money on Bishop Welby after a flurry of bets on him being chosen.
Sources in Canterbury earlier attempted to play down the expectation, with one even suggesting that they had been “surprised” that it was not him.
Although one of the front-runners since the beginning of the process there had been doubts over whether Bishop Welby had been a bishop for long enough. He took over at Durham just a year ago having previously been Dean of Liverpool.