The secretary of state, James Brokenshire, had set early May as the deadline for the current talks process.
It is thought the new deadline will be the end of June.
The provisions to form an executive by that date will be included in emergency legislation that will be fast tracked through Westminster.
The BBC understands the deadline extension is to allow for more talks after the Westminster election on 8 June.
Mr Brokenshire has been briefing party leaders about the details that will be published on Friday.
The secretary of state is under pressure from nationalist parties angry at the prime minister's decision to call a general election in the middle of the Stormont stalemate: Sinn FÃ©in and the SDLP have been scathing about the snap election.
They say it exposes the government's lack of interest in the ongoing negotiations at Stormont, where round-table discussions aimed at restoring power-sharing are due to resume next week.
Earlier, Sinn FÃ©in's Michelle O'Neill said she believed the "British government would prefer no assembly to one which opposes Brexit".
"It's clear that the people of the north who voted to remain in the EU are regarded as saboteurs by Theresa May and her clique of Tory Brexiteers.
"We are no more than collateral damage," she added.
Alliance leader Naomi Long said that people were "never in a compromising mood coming up to an election".
However, she said it would be better for Northern Ireland if an agreement could be reached soon.
Meanwhile, it has emerged the SDLP is pushing ahead with its plan to form an anti-Brexit alliance with other parties in the run up to the general election - and its leader, Colum Eastwood, has held exploratory talks with the Green Party in Northern Ireland on the issue.
"We are interested in a conversation with any party who is interested in protecting the interests of people in Northern Ireland in the face of a hard Brexit," he told the BBC's Evening Extra programme.
"I went out of my way to speak to Steven Agnew (Green Party NI leader). I asked him to consider how we best take this forward."
On Wednesday, MPs voted overwhelmingly to back the prime minister's call for a snap general election on 8 June - three years ahead of schedule.
Shadow secretary of state Dave Anderson accused the prime minister of treating the people of Northern Ireland with contempt by calling the snap poll.
He said: "They're being ignored by this government in exactly the same way as they were ignored pre-Brexit when people were saying to them: 'Are you really aware what you're doing?'"
In a separate development, emergency legislation clearing the way for the collection of rates in Northern Ireland is to be published on Friday.
Mr Brokenshire had promised to bring forward a bill at Westminster to allow rates bills to be issued.
It is one of a number of planned contingency moves to deal with pressures caused by the ongoing political crisis.
Northern Ireland politicians will be given more time to reach a deal to restore a power-sharing executive at Stormont, the BBC understands.