The couple are thought to be using the same surrogate who gave birth to their son Zachary almost two years ago and she is ''several months'' along in the pregnancy.
A source told the Daily Mirror newspaper: ''Elton and David love this lady like a sister and they feel indebted to her for life.
''Naturally she has been well rewarded. But her identity will never be revealed.
''They are over the moon.''
Elton revealed earlier this year that he regretted waiting so long to become a dad.
He said: ''I think it changes everybody. It's the most wonderful thing that you could possibly go through.
''I regret a little bit that I didn't do it sooner, but he has changed our lives. Everything is about him now.
''He's gorgeous, he travels brilliantly, he so loves people, and it makes our lives - he's the icing on the cake.
''The first thing I do every morning is have breakfast with him. He shares my breakfast. Whatever I have, he wants.''
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