The official confirmed a Web site report of the resignation by The New York Times, telling Reuters an official announcement would be made later in the day.
The 51-year-old Bush loyalist was at the center of a political firestorm over the sacking of federal prosecutors last year, which critics in Congress complained were politically motivated.
The official told The Times that Gonzales had told Bush on Friday in a telephone call that he would resign. The official said the job would not be open for long.
Gonzales worked for Bush when he was governor of Texas in the 1990s. He served as White House lawyer in Bush's first term as president before becoming the first Hispanic attorney general in February 2005.
Current and former administration officials had said the department's integrity had been damaged under Gonzales with controversy over the firing of the prosecutors, his support for Bush's warrantless domestic spying program and other issues.
EMPLOYEE MORALE They said as a result employee morale had been hurt and Gonzales' relations with the Democratic-controlled Congress had deteriorated beyond repair in a firestorm of criticism from lawmakers, including some Republicans.
Several senators had said they had lost confidence in Gonzales and his ability to head the Justice Department.
While acknowledging mistakes in the handling of the dismissals, Gonzales had denied the firings were politically motivated to influence federal probes involving Democratic or Republican lawmakers.
Bush has defended Gonzales and cited Gonzales' rise as an achievement for Hispanics, the largest minority in the United States.
''I haven't seen Congress say he's done anything wrong,'' Bush said at a recent news conference. ''As a matter of fact, I believe we're watching ... a political exercise.'' Gonzales drew fire from civil liberties groups for writing in January 2002 that parts of the half-century-old Geneva Convention on the treatment of prisoners of war were ''obsolete'' and some provisions were ''quaint.'' He also was criticized for Bush's warrantless domestic spying program adopted after the Sept. 11 attacks. Only in January, in an abrupt reversal, Gonzales said the program finally would be subject to court approval.
REUTERS RAR RN1832