Ballmer will reveal the touchscreen, slate-style computer during his keynote speech at the International Consumer Electronics Show (CES), The publication said late Tuesday, citing unnamed sources.
The move would upstage Apple's expected announcement of its own, much-hyped tablet computer.
Ballmer will show the device, which is not yet named but will combine multitouch and e-reader functions, the report said. HP will make the device and it could be available mid-year, it said.
The report comes as signs grow that touch-based devices will take much of the limelight at CES this year.
Both HP and Lenovo have announced new netbooks with touchscreen support this week.
An HP spokeswoman declined to comment on the report. Microsoft representatives could not immediately be reached for comment.