"The general idea is that there will be an extension," said one of the officials.
"[Sadr] has distributed sealed envelopes to the imams of the mosques... They cannot be opened before [Friday]."
Al-Mahdi members marched through the streets carrying empty coffins to represent members killed in battles against US troops.
Many members and Sadrist political leaders want to end the truce, saying it is being exploited by Iraqi and US forces to arrest Sadrists, especially in southern Iraq, where rival Shia factions are vying for control.
Sadr's spokesman has previously said the leader would issue a statement by midnight on Saturday if he was renewing the truce. Silence would mean it was over.
The US military blamed the armed group for fuelling a cycle of sectarian violence with Iraq's Sunni Arabs in 2006 and 2007 and at one time called the fighters the greatest single threat to peace in the country.
US army commanders say violence has dropped 60 per cent since June 2007, owing to the ceasefire, an extra 30,000 US soldiers and a number of Sunni Arab leaders turning against al-Qaeda.
Al-Sadr called the ceasefire after clashes between his army, Iraqi forces and the Supreme Islamic Iraqi Council, a rival Shia faction, in the city of Karbala.
While praising al-Sadr for the truce, the US military has pursued what it calls rogue elements. It accuses Iran of arming these groups, a charge Tehran denies.