Chief of Defence Staff Gen. Rick Hillier is expected to be replaced as top military commander when his three-year term expires in February, Conservative insiders have told CTV.
Observers say Hillier, who is popular with rank and file soldiers, had hoped to stay on to oversee the war in Afghanistan.
"Most certainly I think Hiller would welcome a second or a renewal of his appointment and the troops would welcome that also," said Col. (ret'd) Michel Drapeau, a military analyst.
Hillier has been described as a larger-than-life soldier's soldier, spending Christmas with his troops and fighting to rebuild the Armed Forces.
But observers say the government seems determined to get rid of the charismatic general, blaming him for outshining his political masters and undermining former defence minister Gordon O'Connor.
When the Armed Forces held a private farewell ceremony for O'Connor earlier at Ottawa's Cartier Square Drill Hall on Tuesday, Hillier showed up late.
And he wouldn't talk about his often-testy relationship with O'Connor.
Conservative insiders told CTV the late arrival is another example of the general's disrespect for his political bosses.
One senior official told CTV: "Hillier has started to believe his own press clippings."
Another said, "O'Connor is a good guy but he got his feet taken right out from under him by Hillier."
They blame Hillier for embarrassing the former defence minister over his department's failure to reimburse soldiers' families for the full cost of their loved ones' funeral.
Some military observers say removing the popular commander is risky, especially during the war.
"If they were to move him at this stage to take away his contract extension next February, it would be a huge slap in the face," said Scott Taylor, publisher of military magazine Esprit de Corps.
Possible successors include Vice-Admiral Drew Robertson and Lt.-Gen. Andrew Leslie although insiders say Lt.-Gen. Walter Natynczyk is likely to get the top job because the prime minister likes him.
With a report from CTV's Ottawa Bureau Chief Robert Fife