The move could lead to a human rights trial against him, a top court official said on Friday.
"The withdrawal of legal immunity concerns (a case) of the disappearance of opponents of the military regime," said Juan Gonzalez Zuniga, president of the Supreme Court.
Pinochet seized power in 1973 in a bloody coup and led the South American nation until 1990. More than 3000 people were killed or disappeared under his rule.
Pinochet, 88, who has avoided trial for alleged human rights crimes on the grounds that he is mentally unfit, suffers from diabetes and dementia stemming from mild strokes, according to court-ordered medical tests.
If the decision to strip immunity is confirmed by the Supreme Court, Pinochet could be prosecuted in connection with the disappearance of nine left-wing activists.
They were arrested in Argentina in the framework of Operation Condor, a South American spy network that repressed opponents of those countries' military dictatorships.