Aljazeera reported that the Pope was suffering from severe kidney failure.
Cardinal Javier Lozano Barragan, head of the Vatican's health care office, said that the Pope "is about to die".
"I talked to the doctors and they told me there is no more hope," the Mexican Cardinal said.
As news of the imminent death spread, tens of thousands of faithful across the globe lit candles, wept and prayed.
Thousands kept an overnight vigil outside the pontiff's Vatican home, watching the top-floor windows for the latest clues about his health.
The Vatican said on Friday morning that John Paul II was in a "very grave" condition after suffering blood poisoning from a urinary tract infection the previous night.
Priests are readying the faithful
for the Pope's imminent passing
But they quickly added he was "fully conscious and extraordinarily serene" and declined to be hospitalised.
By nightfall, however, the Pope's condition had worsened further, and he was suffering from kidney failure and shortness of breath, the Vatican said.
The pontiff's health had declined sharply on Thursday when he developed a high fever brought on by the infection. The Pope suffered septic shock and heart problems during treatment for the infection.
Septic shock involves bacteria in the blood and a consequent over-relaxing of the blood vessels. The vessels, which are normally narrow and taut, get floppy in reaction to the bacteria and cannot sustain any pressure. That loss of blood pressure is catastrophic, making the heart work hard to compensate for the collapse.
"The chances of an elderly person in this condition with septic shock surviving 24 to 48 hours are slim - about 10% to 20%, but that would be in an intensive care unit with very aggressive treatment," said Dr Gianni Angelini, a professor of cardiac surgery at Bristol University in England.
"I talked to the doctors and they told me there is no more hope"
Cardinal Javier Lozano Barragan head of the Vatican's health care office
With death almost inevitable, priests readied Roman Catholics around the world for the Pope's passing. Many expressed hope that his final hours would be peaceful.
"Now he prepares to meet the Lord," Cardinal Francis George said at a Mass in Chicago. As the portals of death open for him, as they will for each of us ... we must accompany him with our own prayers."
At St Peter's Square in Vatican City, some faithful sat on the cobblestones or bowed their heads as they prayed.
Wrapped in blankets, many tearfully gazed at John Paul II's top-floor windows, where lights remained on early on Saturday.
The praying crowd of about 70,000 was so silent at one point that the sound of the square's trickling fountains was audible. At other points, the crowd sang: "Stay with us!"
Roman Catholics around the
world are praying for the Pope
In Wadowice, Poland, where the Pope was born, people left school and work early and headed to church to pray for their native son.
"I want him to get better because I want him to come to Wadowice again," said Rafal Jakubowski, a 12-year-old schoolboy.
In the Philippines, tears streamed down the face of Linda Nicol as she and her husband asked God to grant John Paul II "a longer life."
Hospitalised twice last month after breathing crises, and fitted with a breathing tube and a feeding tube, John Paul II has become a picture of suffering.
His 26-year-long papacy has been marked by its call to value the aged and to respect the sick, subjects the Pope has turned to as he battles Parkinson's disease and crippling knee and hip ailments.
The Pope also survived a 1981 assassination attempt, when a Turkish man shot him in the abdomen.