The expected visit by Junichiro Koizumi, shortly before he departs office, would likely further damage Japan's already tense ties with China and South Korea, where bitter memories of Japan's past aggression run deep.
Among the country's 2.5 million war dead honoured at the Yasukuni shrine in central Tokyo are several convicted war criminals.
Koizumi, who is set to step down in September after more than five years in office, promised during his campaign to become ruling party chief in 2001 that he would visit the Shinto shrine on the August 15 anniversary.
He has visited every year since then, but never on that date.
"I think he will visit the shrine to keep his promise," Taku Yamasaki, a long-time Koizumi ally, was quoted as saying in a TV interview on Monday.
"I think he will visit the shrine to keep his promise"
Taku Yamasaki, ruling party lawmaker
News photographers and TV crews staked out the Tokyo shrine over the weekend in case Koizumi visited before the anniversary.
Defending his visits, Koizumi has said he goes to the shrine to pray for peace and honour those who gave their lives for their country.
Critics argue his visits reflect Japan's failure to own up to its wartime past, including atrocities committed in Asia.
Japanese public opinion is divided on whether the prime minister should make pilgrimages to Yasukuni and the ruling Liberal Democratic Party (LDP) is itself split on the issue.
"He should think about what he intends in his heart to do from a diplomatic, domestic and historical perspective"
"He should think about what he intends in his heart to do from a diplomatic, domestic and historical perspective," Kyodo news agency quoted Koichi Kato, an LDP lawmaker, as saying.
The shrine, which played a central role in the state Shinto religion that mobilised the nation to fight in the name of a divine emperor, considers 14 wartime leaders convicted by an Allied tribunal as Class A war criminals to be "martyrs".
A museum on its grounds depicts the Pacific war as one Japan was forced to fight in its self-defence and has been criticised for ignoring atrocities committed by Japanese in Asia.
Visits by Japanese leaders to the shrine have become a focus of the competition to succeed Koizumi in a ruling party leadership election on September 20.
Many Japanese business leaders, worried about the impact of the diplomatic chill on vital economic ties with China, have made it clear that they want the next prime minister to halt the visits.
Shinzo Abe, Koizumi's heir apparent and chief cabinet secretary, has defended Koizumi's pilgrimages and went there himself on August 15, 2005.
Secular war memorial
Media have said that Abe paid a secret visit in April, but the popular 51-year-old politician - a diplomatic hawk known for his tough stance toward China and North Korea - has declined to say whether he would go there if he becomes prime minister.
The shrine is seen as a symbol of
Japan's past militarism
Some politicians have suggested creating a new secular war memorial, enhancing an existing memorial for unknown soldiers, or removing the names of the war criminals from the lists of those honoured at Yasukuni as ways to resolve the diplomatic dilemma.
The shrine is opposed to those ideas as well as a proposal by Taro Aso, the foreign minister, a lagging contender to become prime minister, to turn it into a secular memorial run by the state.