One of the directors would join after the agreement is formalized, while another would be recruited at a later date, the sources said. Both would be chosen by Duke but have the blessing of Elliott, the sources added.
An agreement that would avert a board challenge could be secured before the end of the year, the sources said. They cautioned however, that no deal is certain and that terms could change. They asked not to be identified because the matter is confidential.
Duke and Elliott declined to comment.
Shares in Charlotte, North Carolina-based Duke briefly spiked to a six-week intraday high on the news, before giving up some of the gains. It was up 0.8% in mid-afternoon trade, giving Duke a market value of around $80 billion.
Elliott earlier this year pressed Duke to conduct a strategic review, suggesting it split into three companies focused on the Carolinas, Florida and the Midwest. The hedge fund said this plan should create $12 billion to $15 billion of near-term value for shareholders.
In response, Duke said there was no strategic logic to breaking the company apart. It argued the move would burden each entity with extra costs that would negatively impact services and threaten Duke's ability to pay its shareholder dividend.
Elliott's push at Duke follows campaigns at other companies in the sector including Sempra Energy and Evergy Inc.
(Reporting by Svea Herbst-Bayliss and David French in New YorkEditing by Chizu Nomiyama)
By Svea Herbst-Bayliss and David French