Kunkle has spent the past five years as the head of the largest police department in North Texas. He is expected to formally announce his departure Thursday morning.
Sources say Kunkle may pursue opportunities in the private sector, possibly joining recently retired Los Angeles Police Chief William Bratton as a security consultant.
Kunkle, who turned 59 on Friday, is expected to announce his retirement during a command staff meeting first thing Thursday morning, at about 8:30 a.m.
From there, Kunkle will reportedly meet with the presidents of the six police associations before holding a public news conference later Thursday morning.
Kunkle's retirement is expected to be effective as of April 30, 2010, but he may leave sooner because of accumulated vacation, comp and sick time.
He told the Dallas Morning News he has decided to "term-limit myself" and is leaving on his own terms.
Kunkle was a deputy city manager in Arlington before he was hired in 2004 after the ouster of Chief Terrell Bolton. Kunkle, who was previously chief of police in Arlington and Grand Prairie, reorganized the Dallas Police Department within weeks of coming on board.
During Kunkle's tenure in Dallas, the city has seen major drops in crime. Last month, the city reported a nearly double-digit drop in crime in 2009 as compared to last year.
The city also saw a reduction in crime in 2008 that saw Dallas finally give up its distinction of having the country's worst big-city crime rate. In 2008, crime fell 10.3 percent compared to 2007.
Kunkle has credited the drops with increases in the number of police officers, as well as community programs and support from the district attorney's office.
But the Dallas Police Department has also made headlines across the country in less positive ways this year.
Last month, the department came under fire after it was revealed that Dallas officers were improperly citing drivers for not speaking English.
And Dallas police drew national criticism in the spring when an officer delayed a Houston Texans running back from entering a hospital where the player's mother-in-law was dying. The officer later resigned from the department.
A nationwide search for a new police chief is underway, the city said Wednesday. City Manager Mary Suhm said she expects internal candidates to apply.