According to the report citing people familiar with the situation, the move is designed to ensure that China cannot use the app for political influence and espionage.
TikTok has repeatedly denied that it has links to the Chinese government.
The sale proposal appeared in discussions by the US Committee on Foreign Investment, an interagency government panel that has been holding talks with TikTok for over two years to separate the company’s data and operations from the Chinese government.
The forced sale is supported by Pentagon and Justice Department representatives on the panel, the report said, adding that the app should be separated from its Chinese owner, Beijing-based ByteDance Ltd.
However, the Treasury Department, which chairs the panel, is seeking other possible solutions, as more than 100 million Americans use the TikTok app in the United States.
Ex-US President Donald Trump unsuccessfully tried to drive TikTok under US control.
TikTok has declined to comment on the forced sale prospect, adding that it can address the US government concerns.