The switch is likely to happen 'within the next several weeks', reported the New York Times, citing senior administration officials as saying.
In a press briefing, Sanders said, "When the president loses confidence in someone, they will no longer serve in the capacity that they're in."
She made the statement after the reporters repeatedly asked if the President has confidence in Tillerson.
Sanders said that President Trump and Tillerson will be "continuing to work together to close out what we've seen to be an incredible year."
States department spokesperson Heather Nauert on Thursday in a statement said, "Tillerson will also meet with senior Belgian officials, as well as EU High Representative for Foreign Affairs and Security Policy Federica Mogherini and the foreign ministers of the 28 European Union member states to discuss US-EU cooperation on major global issues."
Tillerson has been at odds with Trump over a host of major issues.
Their approaches have disparities on North Korea and Iran's nuclear programme among other issues.
The Secretary of State was even reported to have described the president as a "moron".
Trump had publicly criticized Tillerson for "wasting his time" with a diplomatic outreach to North Korea.