Swedish Television News reports that it has sources saying Sweden will not recognize Sahrawi Arab Democratic Republic (SADR) .
Minister for Foreign Affairs Margot Wallström will likely announce the decision soon, reports the news outlet.
The issue has long been politically controversial. During the previous center-right Alliance administration, the opposition Social Democrats were able to gain a majority in parliament and vote to recognize SADR. The government, however, did not follow the decision.
Morocco has been very critical of a potential recognition of the disputed territory. Morrocan political delegations have visited Sweden in an attempt to sway politicians.
The North African country is an important trade partner to Sweden. According to Swedish Television's sources, trade with the country has suffered during the diplomatic crisis. Moroccan authorities, for example, blocked the grand opening of an Ikea store in the country. Ikea has plans to open five new stores in Morocco.
Last fall, the Swedish ambassador to Morocco, Fredrik Floren, was tasked with reviewing the Western Sahara issue, and that report is now complete according to Swedish Television's sources.
The news outlet writes on their website that Minister Wallström may make the announcement on Monday as Moroccan President Rachid Talbi Alami is scheduled to visit Sweden Tuesday.
Margot Wallström's press secretary told Swedish Television that Wallström would not comment on the matter until the ambassador's report is completed and submitted.
Swedish Television speculates that the government will motivate non-recognition by arguing that Western Sahara does not meet the traditional criteria for recognition of a state like having a defined territory, a permanent population, and a government that controls the territory.