Sharon came to the compromise after talks with key ministers that led him to conclude that his full revamped plan would be rejected in a key vote at Sunday's weekly cabinet meeting, Israeli public and army radio reported on Thursday.
On Sunday, government ministers will be asked to approve the evacuation of just three settlements - the isolated Netzarim and Morag colonies in southern Gaza, as well as Rafiah Yam in the far south of the Israeli-occupied territory.
The three settlements are seen as the most exposed to resistance attacks. Preparations for their evacuation were expected to take nine months, said the radio reports.
Sharon was nonetheless expected to ask his government to "take note" of his full plan for a phased military pullout as well as the evacuation of 21 Jewish settlements in the Gaza Strip and four in the northern West Bank.
The 'withdrawal' from Gaza will be accompanied by an expansion in control of the occupied West Bank.
The Israeli premier would also tell the parliament that he was not giving up on his full plan.
Sharon was humiliated on 2 May when his Likud party rejected a first version of his proposal to pull back unilaterally from Gaza, despite US backing for the plan.
Likud party members voted on 2
May against an Israeli pullout
But since then he has worked to convince sceptical ministers to accept the modified version of his so-called "separation plan".
By choosing to proceed with a step-by-step approach, Sharon would allow the government to put a halt to the evacuation depending on the situation on the ground, an aide to the prime minister said.
By the end of the process, Israel would retain control of Gaza airspace and territorial waters but would remain on the ground only in an expanded buffer zone along the border with Egypt, scene of a large-scale Israeli operation that left 43 Palestinians dead earlier this month.
Sharon thus hoped to reassure wary ministers and convince the National Religious Party (NRP), one of two far-right parties in his coalition with six MPs in the 120-member Knesset, to remain in government.
On Thursday, the Israeli prime minister tried to persuade undecided ministers like Finance Minister Benjamin Netanyahu, his main rival in the Likud party, to back his full plan.
Israeli media reported that while 11 ministers in the 23-strong cabinet supported the plan, eight were against, meaning Sharon needs one of the three undecided ministers to win a full majority, without his own 23rd vote.
According to an opinion poll released Thursday on public radio, 60% of Israelis support a withdrawal from the Gaza Strip, where 13 soldiers were killed in the first half of May, while 40% oppose the move.