Sudan is hosting a summit of the 53-nation body next week, and by tradition the host takes over the chairmanship.
Critics say this would undermine AU-mediated talks to end the conflict in Sudan's west where AU troops are monitoring a ceasefire.
The US State Department has already indicated its opposition to Sudan assuming the chairmanship at a time when the country is widely accused of stoking violence in the western Darfur region.
Spokesman Sean McCormack said. "There are certain contradictions in the idea of Sudan holding the chair of the AU while there is an AU mission in Sudan designed to help protect Sudanese citizens in part from the government of Sudan."
Sudan, under fire for its human rights record, says it has the backing of 12 East African states for its bid to take over the chair from Nigeria.
Lam Akol, the Sudanese foreign minister, said: "We are very glad about this. We think that the other nations will follow the same path and back us."
Lam Akol believes more African
countries will back Sudan
Egypt said East Africa backed Sudan to head the organisation officially launched in 2002 to help promote democracy, human rights and development across Africa.
Mahamoud Ali Youssouf, Djibouti’s foreign minister, said it was East Africa's turn to take the presidency and said giving it to Sudan would both reward it for ending a more than 20-year war in its south and encourage it to end fighting in Darfur.
"It will be helpful to give credit to the government of Sudan so that it could go further in the resolution of the conflict in Darfur," he said.
Khartoum says Nigeria would still host any peace talks, even if it is no longer head of the AU. But Darfur's two main rebel groups say they will quit the talks if Sudan takes over.
Diplomats said few African states were ready to oppose Sudan's bid openly, even if they were not keen on it, because of an African tradition of non-interference in each others' affairs.
"There is no clear alternative, which works in Sudan's favour. Those who are uneasy with Sudan may not turn up and so not be able to vote. Sudan may get it by default," said one Western diplomat.
No country has announced a rival contender for the position. African officials said Central African states could field a candidate, which some said might be Congo Republic, but they said no decision had been taken yet.
Central African state Chad, which accuses neighbouring Sudan of backing rebels seeking to overthrow President Idriss Deby, is the only nation which has openly campaigned against Khartoum.
"There are now three possibilities. Either Central Africa nominate someone, probably Brazzaville, or we get it, or they delay the decision and keep Obasanjo," a senior Sudanese official said.
The AU has won plaudits for deploying forces in Darfur, the organisation's first major foray into peacekeeping and has been praised for a review process that encourages good governance in a continent where corruption has long deterred investors.
Analysts say the good work could be undone by choosing Sudan as chairman because it would be seen to reward a government whose actions in Darfur have been widely condemned abroad.