Sources speaking to the publication said the glasses would connect wirelessly to the iPhone and push information into the user's field of vision.
Additional details, like pricing and release date, are unknown. Bloomberg reported Apple has talked to potential suppliers and could launch the smart glasses product as soon as 2018.
An Apple spokesperson declined to comment.
Apple often changes course, as we saw with its Project Titan car initiative. It's not clear if the project will actually come to market or pivot into something else.
Apple has been flirting with augmented reality through several acquisitions. CEO Tim Cook previously said AR is an area of interest for the Cupertino, Calif.-based technology giant, more so than virtual reality.
"My own view is that augmented reality is the larger of the two, probably by far, because this gives the capability for both of us to sit and be very present talking to each other, but also have other things visually for both of us to see," Cook told ABC News in September. "Maybe it's something we're talking about, maybe it's someone else here that is not here, present, but could be made to appear to be present with us. So there's a lot of really cool things there."
Apple would come into a budding and increasingly crowded glasses space. Facebook has been leveraging its Oculus acquisition for virtual reality, with Samsung and HTC trying to compete with similar over-the-head goggles. Microsoft has pushed AR with HoloLens.
"AR is going to take a while, because there are some really hard technology challenges there," Cook said in a rare question and answer session last month. "But it will happen, it will happen in a big way, and we will wonder when it does, how we ever lived without it. Like we wonder how we lived without our phone today."