The 18-year-old is said to currently be living under the name Stephen Ira and wants to have the surgery now she is an adult - despite her parents being upset about the issue.
A source told National Enquirer magazine: "Warren is beside himself over the situation with his daughter Kathlyn. He and Annette have tired to deal with this over the years when their daughter was younger, but she's determined to go ahead with the transgender operation, just like Chastity Bono.
"She repeatedly told her parents that 'once I turn 18', she would take matters into her own hands."
Kathlyn is the oldest child for the Hollywood couple, who also have a son, Benjamin, 15, and daughters, Isabel, 13, and Ella, 10.
Chastity Bono - the daughter of singer Cher and her former husband Sonny Bono - recently underwent the final stages of gender realignments surgery completing the legal transition from a woman to a man, and is now known as Chaz.