Ha'aretz Online reported that Attorney General Avichai Mendelblit is expected to inform Sara of the charges against her in a few weeks.
She is suspected of ordering chef's meals at the prime minister's official residence, which is against regulations, and concealing the fact that she did so, the report said.
She and her husband have accused the former chief caretaker of the official residence, Meni Naftali , who is leading protests against the prime minister, of inflating the residence's expenses.
At the rally, Netanyahu described the investigation "as a preoccupation with unimportant matters".
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"They're dealing with the most important things in the world," he said at the Likud party rally, sarcastically adding, "the procedure for replacing a light bulb, trays of food, the cup of tea that was served to her (Sara's) father, a righteous man, on his deathbed".
The decision to indict Sara in the so called "residence affair" is likely to be the first in a series of moves to be made in the coming months in cases in which the prime minister and members of his inner circle are suspects.
A senior law enforcement official told Ha'aretz that there was a likelihood that police would submit their recommendations on Cases 1000 and 2000 in which Netanyahu is a suspect in December.
In Case 1000 Netanyahu is suspected of illicitly receiving gifts from wealthy patrons and in Case 2000 there is a suspicion that he tried to concoct a deal with the publisher of the largest circulated daily, Yedioth Ahronoth, to receive favourable coverage in exchange for cutting back on commercial activity of the competing free daily, Israel Hayom.
"This is a dynamic investigation," the source reportedly said.
Meanwhile,a former minister wasquestioned by police under caution today in connection with an expanding corruption probe into a multi-million-dollar purchase of naval vessels from Germany, known as the submarine affair, that has implicated several senior political and military officials.
The former minister, whose name was withheld from immediate publication by a gag order, was questioned at the police's anti-corruption unit Lahav 433 in Lod, the police said in a statement also denying earlier reports that a sitting minister was interrogated.
Six suspects were arrested in police raids including yesterday, including David Sharan, who served as Netanyahu's bureau chief from late 2014 to 2016 on suspicion of bribe- taking, fraud, breach of trust and conspiring to commit a crime.
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