(Credit: Screenshot/CNET)

The Journal first reported the news on Sunday via Twitter.

An imminent announcement of the acquisition had been expected. AllThingsD reported Friday that Yahoo's board was meeting this weekend to finalize a deal. Rumors about the possible tie-up first surfaced on Thursday. The deal could be announced on Monday as part of a product announcement event Yahoo is holding in New York tomorrow. According to reports, Tumblr's board of investors, including Sequoia Capital, Union Square Ventures and Spark Capital, who have put $125 million into the company, have already approved Yahoo's bid.

Read: Could Tumblr turn into Yahoo's MySpace?

A Tumblr acquisition would be Yahoo CEO Marissa Mayer's biggest move so far in trying to achieve her "moonshot" goal of making Yahoo a daily habit for every Internet user. Yahoo has a large and aging audience -- 700 million -- and Tumblr brings an infusion of younger, mobile eyeballs. The blogging site has an audience and social network of 108 million blogs and more than 100 million visitors per month, most of whom are in the Web-savvy 18-to-34 demographic, which is of high value to advertisers. In addition, Tumblr is becoming more of a mobile-first service that Yahoo craves --- about half of Tumblr users access the service via mobile devices.

Read: Marissa Mayer's moonshot goal -- Yahoo on every device

"We're working hard to get some of the younger folks," Yahoo Chief Financial Officer Ken Goldman said at the J.P. Morgan Global Technology conference last week, adding that the company needs content that's more relevant to the 18-to-34 age bracket.

Tumblr generated only $13 million in revenue for 2012, but has initiated a major push into "native" advertisements, similar to Twitter's promoted posts and Facebook's sponsored posts this year.

CNET's Dan Farber contributed to this report.