The Civil Administration's settlement subcommittee was set to meet on Wednesday to approve the submission of the plan to build 3,000 housing units in the E1 area between Jerusalem and Maaleh Adumim.
The units would be built on around 12,000 dunams (about 3,000 acres) of state land northwest of Maaleh Adumim.
Approving the submission of the plan would open the door for objections to be filed. The entire process could take a prolonged period of time.
Last weekend, the Political-Security Cabinet approved a plan to go ahead with construction in E1, in response to the Palestinian Authority's successful unilateral bid to receive nonmember observer state status at the U.N.
Israel's announcement of construction in E1 prompted criticism from around the world and Israeli ambassadors have been summoned by the foreign ministries of a number of countries for reprimand meetings.
Opponents of Israel's move have claimed that construction in E1 would effectively sabotage any prospect of a peace agreement between Israel and the Palestinians.
Former Prime Minister Ehud Olmert has been one of the critics of Israel's announcement that it will build in E1. However, while prime minister in 2006, Olmert told Haaretz that "it is unthinkable that we would talk about Maaleh Adumim as part of the State of Israel and leave it as an island or isolated enclave. It is absolutely clear that there will be built-up continuity between Jerusalem and Maaleh Adumim."
In response to this quote coming to light, an Olmert spokesperson said on Tuesday that Olmert had always supported construction in E1, but only after a negotiated agreement on the matter.
"Olmert insisted that the area would remain under Israeli sovereignty in a final-status agreement with the intention being to build there to create territorial contiguity with Maaleh Adumim," the Olmert spokesperson said.