Malcolm Gillies, the university's vice-chancellor, told The Sunday Times that the decision would have an "immense" impact on London Met and its partners, warning that the students affected would include those already enrolled.
"Their surprise, shock and concern will be huge, and we shall work with them to ensure they have the widest range of options to continue their studies, either in the UK or elsewhere," he said.
The Home Office has since said that no final decision has been taken.
Professor Gillies added on Sunday that the university was "immensely disappointed" by the news, stating that it had done everything it could to demonstrate its fitness to continue educating overseas students since the UKBA suspended its highly trusted status six weeks ago.
The Sunday Times said Theresa May, the Home Secretary, would write to David Cameron at the weekend to inform him of her decision, following an audit of London Met earlier this month.
UK Border Agency inspectors reportedly concluded that students were "continuing to study at [London Met] without valid leave [visas] despite the university having reassured us that this issue had been rectified".
They also reportedly found that the university had failed to report students who had secured study visas but had not turned up for courses, and that there were shortcomings in the testing of English language skills and the keeping of records.
London Met would be the first UK university to have its highly trusted status revoked, although two others - Glasgow Caledonian University and Teesside University - have previously had their licences suspended and then reinstated.
The university would be entitled to appeal against the UKBA's decision, and will be able to reapply for Highly Trusted Sponsor status in six months.