HS2 will start at Euston rather than Old Oak Common - but between Birmingham and Manchester it will not be high speed, Sky News understands.
The rail line will stop in Manchester, but from Birmingham it will switch to use existing West Coast Mainline track.
It will therefore not be high speed after Birmingham - effectively confirming days of speculation that the northern leg of the controversial project has been shelved.
Alongside the doubt over Manchester, there have also been question marks over Euston station and whether the line would terminate there as originally planned.
There had been rumours that it could stop at Old Oak Common instead, but Sky News understands the rail line will stop at Euston in a move that could be designed to placate critics.
The development, broken on the Politics Hub with Sophy Ridge programme, follows repeated attempts by Rishi Sunak and other members of the Cabinet to bat away questions regarding the future of the northern leg of the project.
The government initially tried to downplay the original reports, saying they were "incorrect" and that no "final decisions" had been made regarding the northern leg, known as phase two.
But despite their attempts, questions over HS2 have dominated Mr Sunak's first party conference as leader and prime minister.
After the latest development, Greater Manchester mayor Andy Burnham posted on social media: "So, in other words, HS2 won't go to Manchester and people in the North will be treated as second-class citizens - again?
"What a disgrace."
Speaking later at an event near the Tory conference venue, Mr Burnham said 40 businesses had written to the prime minister on Tuesday night to urge him not to pull the plug.
"If you think about that for a moment, you know that will be a permanent statement for people in the north of England that they are second class citizens when it comes to transport infrastructure," he added.
"It beggars belief in some ways that they are going to do this, they are going to pull the plug on that infrastructure that would pave the way for that new east-west line across the north, promised in not one, not two, but three Conservative manifestos.
"But to pull that plug here in Manchester would show complete contempt to the city region and to the north of England as a whole."
Mr Burnham told the audience: "We say to them tonight: it isn't too late from our point of view, you could invite us in.
"Do not pull the plug on this city while you are in this city.
"If you do do those things, people here will never forget."
The first indications that the leg to Manchester could be scrapped came after it was reported last month ministers were considering shelving the northern phase because of concerns about spiralling costs and severe delays.
According to The Independent, a cost estimate revealed that the government has already spent £2.3bn on stage two of the railway from Birmingham to Manchester, but that ditching the northern phase could save up to £34bn.
The reports immediately drew criticism from across the political divide, including from former Conservative prime ministers Boris Johnson and Theresa May.
Speaking on the Politics Hub with Sophy Ridge, Science and Technology Secretary Michell Donelan said the latest reports were "still speculation".
"I know, having worked around the cabinet table with the prime minister, that he is somebody who is very thorough when it comes to the detail," she said.
"So I'm going to give him the time and wait and see what he says tomorrow."
Asked why the government was not confirming what is happening on HS2, Ms Donelan said ministers wanted to "get it right" on the project.
"If I was the prime minister, I'd be doing exactly what he's doing," she said.