The group is also likely to target global sales of over 10 million vehicles in 2014, the source said.
Toyota is likely to have become the world's first automaker to build 10 million vehicles in a single year due partly to brisk sales in overseas markets such as the United States and China.
Its worldwide production from January to November 2013 stood at 9.34 million units, up 0.9% from the same period in 2012.
The production target includes the output of its group firms Daihatsu Motor Co and Hino Motors Ltd. Toyota is likely to inform parts suppliers of its detailed production plan later this month.
With a hike in Japan's consumption tax set for April, Toyota has set its 2014 domestic production target at 3.10 million units on a parent-only basis, down from the 3.35 million units targeted in 2013, the source said.
Toyota has said it will maintain domestic production of 3 million vehicles a year partly to keep domestic jobs.
The automaker usually releases its yearly production and sales targets at the end of the preceding year, but delayed releasing the 2014 estimates in order to calculate the effect of the tax hike.
Toyota's revised 2013 targets released last August aimed for 10.12 million units produced worldwide and 9.96 million units sold.