Megrahi is the only person to be convicted over the bombing
Lockerbie bomber Abdelbaset Ali al-Megrahi is set to learn whether he will be allowed to return to Libya.
The BBC understands he will be flown home to Tripoli from Glasgow this afternoon following an announcement by Justice Secretary Kenny MacAskill.
Megrahi, 57, who has served eight years of a life sentence for killing 270 people in the 1988 bombing of Pan Am flight, has terminal prostate cancer.
Some 189 Americans were among those who died in the airliner explosion.
Mr MacAskill has been under intense pressure from the US government to keep Megrahi behind bars, with US Secretary of State Hillary Clinton saying his release would be "absolutely wrong".
Earlier, a letter from seven US senators including Edward Kennedy and John Kerry had urged the Scottish Government to block Megrahi's bid for release.
Brian Taylor BBC Scottish political editor
Scottish ministers must hope discontent is primarily aimed at the option of prisoner transfer and not the more likely avenue of compassionate release.
That, I would suggest, is likely to be a tough sell.
US opinion may simply find it difficult to understand why a man convicted of involvement in the death of 270 people, including US citizens, has been released.
Mr MacAskill said on Wednesday he had informed families and other interested parties that he had reached his decision on the applications for compassionate release and a prisoner transfer.
He will announce his decision at 1300 BST at the Scottish Government's ministerial headquarters in Edinburgh.
A spokesman for the administration insisted the decision had been reached "on the basis of clear evidence and on no other factors".
BBC correspondent Peter Hunt said Megrahi was described as having only months left to live.
"Given this prognosis, it's thought that the perpetrator of Britain's biggest terrorist atrocity - who two days ago abandoned his appeal against his sentence - has now spent his last night in a Scottish jail.
"It's expected he will be allowed to return home to die," he added.
Hillary Clinton: ''We think it is very much against the wishes of the family members''
It is thought preparations for Mr Megrahi's possible release were being made in time for him to be home with his family in Libya by Ramadan, which starts on Friday.
Chancellor Alistair Darling, standing in for the prime minister while Gordon Brown is on holiday, said it was a decision for the Scottish Government.
On Tuesday, judges at the High Court in Edinburgh who accepted Megrahi's application to drop his appeal were told the Libyan's health had recently worsened very considerably.
Megrahi has recently been serving his sentence at HMP Greenock, in the west of Scotland, after being convicted of the bombing under Scots law at a specially convened court in the Netherlands in 2001.
LOCATIONS WHICH SHAPED MEGRAHI'S TRIAL
1. Tripoli, capital of Libya. Megrahi was born here on 1 April 1952, and worked - according to the FBI - for Libyan intelligence services.
2. Malta. Megrahi's day job, as security chief for Libyan Arab Airlines, took him to their office on the island. From there he would travel to Zurich. The bomb began its journey here in December 1988.
3. Zurich, Switzerland. The bomb's timing device was made and purchased here.
4. Frankfurt, Germany. On arrival, a suitcase later found to have contained the bomb was transferred from an Air Malta jet to a flight bound for London Heathrow.
5. London's Heathrow Airport. Pan Am flight PA 103 took off from Heathrow at 1825 GMT on Wednesday, 21 December 1988.
6. Lockerbie, Scotland. The bomb on Flight PA 103 exploded above the Scottish village at 1902 GMT.
7. Camp Zeist, Netherlands. Here, in a landmark trial, Scottish judges convicted Megrahi in 2001.
8. HMP Barlinnie. Megrahi served the first part of his sentence in this Scottish prison.
9. HMP Greenock. Megrahi was transferred from Barlinnie to Greenock in 2005.
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