The Ravens will formally announce the decision on Saturday, when the team makes its major cutdown. Once Reed is put on the Reserve PUP list, the six-time Pro Bowl defender will miss at least the first six weeks of the regular season.
The expectation is Reed will be fully recovered from offseason hip surgery by Week 7, when the Ravens play the Buffalo Bills on Oct. 24.
Reed, who will turn 32 this month, is still considered one of the top playmakers in the NFL. But Reed's extended absence isn't a detrimental hit to the Ravens because backup Tom Zbikowski has filled in so admirably this summer.
Reed's hip injury dates back to last December, when he missed four games. That ended his streak of 64 straight games played.
There was hope that Reed would be ready to play in the Sept. 13 season opener despite not practicing this year. Harbaugh wouldn't rule out Reed earlier this week.
But Reed had a meeting with general manager Ozzie Newsome at Ravens headquarters on Friday, when the decision was likely reached.
Reed declined comment when approached by reporters in the Ravens locker room earlier this week.
It doesn't come as a surprise because Reed acknowledged PUP was a possibility two months ago. In late June, Reed told a local radio station that he was "leaning" toward going on the PUP to start the regular season.
"It's going to be challenging opening up with the schedule we have whether I'm there or not," Reed said on 105.7 The Fan in June. "If that's the case, which I'm leaning toward that way more than anything, hopefully we can weather the storm. We have great players around us to get through those games and be able to make a run."
But Reed later said he was taken out of context.
Reed had hip surgery sometime after the draft in April, which requires four to six months of recovery time. He has been working independently with trainers in Atlanta.
It was in July when Reed revealed some friction between himself and the team. Reed said the Ravens refused to provide him game tape to study, an incident that Harbaugh later described as a miscommunication.
At his football camp that month, Reed indicated that he wouldn't rush back from the injury.
"Honestly, I probably shouldn't even be playing this year," Reed said in July.
Under NFL rules, Reed has to miss the first six weeks of the regular season when placed on Reserve-PUP. After Week 6 (whether a team has had a bye or not), a 21-day period begins where a player can begin practicing. He can start practicing at any point during those 21 days.
Once that starts, a 21-day practice period begins. The player could be activated at any time within those 21 days. At the end of the 21 days, the team must either activate the player, release the player or keep him on Reserve-PUP for the remainder of the season.
Reed, who was drafted in the first round by the Ravens in 2002, has missed a total of 10 games in his eight-year NFL career. He contemplated retirement after the Ravens' divisional playoff loss at Indianapolis, but he decided to return months later.
In recent seasons, Reed has played with a nerve impingement in his neck and shoulder area, which has limited his ability to tackle.
Reed, though, has the ability to change games. In last year's playoffs, he made two interceptions. The 2004 NFL defensive player of the year has a franchise-best 46 interceptions and has scored 13 touchdowns in his career.
Historically, the Ravens have struggled without Reed, losing seven of 10 games when he's not in the starting lineup. The defense has given up an average of 19.6 points.
But when Zbikowski replaced Reed in four games last season, he made two interceptions.
At the start of training camp, Harbaugh was very complimentary of Reed for how he's handled the hip injury as well as his nerve impingement.
"I agree with Ed, he has fought through injuries as well as anybody in the NFL," Harbaugh said in late July. "I really respect that. He will be playing for us as soon as he possibly, and I believe it will be as early as he possibly can."