Line, owned by South Korea's Naver Corp, has hired Nomura Holdings Inc and Morgan Stanley to manage the IPO in Tokyo and is also considering listing in New York, the person said.
Line and Naver declined to comment.
The Line messaging app has expanded rapidly overseas in Asia and America, claiming popularity with its games and oversized emoticons, called stickers. Global downloads have surpassed 480 million, the company said.
The company recorded 14.6 billion yen in revenue in January-March - a more than threefold increase on the year. With full-year sales hitting 51.8 billion yen last year, Line was the highest-grossing non-game app of 2013, according to analytics firm App Annie.
Another person familiar with the IPO plans said parent Naver is likely to favour the sale of preferred shares to prevent a third party taking control of Line, whereas Line would prefer to sell ordinary shares to increase the proportion of Japanese retail investors.
A 57 percent rise in Japan's benchmark share index last year spurred an increase in IPOs. Restaurant chain operator Skylark Co Ltd and game developer Gumi Inc are also planning to launch IPOs this year in Tokyo.
© Thomson Reuters 2014