The club will hold a press conference in central London at 5.30pm, with Holloway's departure expected to be confirmed.
Sky Sports News reported that Holloway's stint at Selhurst Park is over, less than a year after he took charge.
Speculation had centred on the 50-year-old manager's future following Monday night's 4-1 home defeat to Fulham, that left Palace second from bottom in the Barclays Premier League.
Palace have taken just three points from eight league matches since their promotion to the top flight, with Sunderland the only team possessing a worse record. Palace are five points adrift of safety.
Palace's short statement announcing the press conference in Soho did not specify the reason for the press conference and the club declined to make further comment.
Holloway was appointed by Palace in November 2012 and led the club to promotion through the play-offs, with a 1-0 win over Watford at Wembley securing their place in the Premier League.