The US military gathers intelligence while in uniform during operations or wars abroad, while the CIA's spies work clandestinely as civilians.
"The proposal is the latest chapter in the fierce and long-running rivalry between the Pentagon and the CIA for dominance over intelligence collection," the Times said.
A section of the Pentagon proposal being drafted by Lieutenant General William Boykin would give special forces "some of the flexibility the CIA has had for years," a Defense Department official told the Times.
The daily said the proposal being drafted by the Pentagon would increasingly focus US military intelligence operations in areas where the Central Intelligence Agency has had a leading role: counter-terrorism and counter-weapons proliferation.
The proposal suggests a major expansion in the use of spies to gather human intelligence and the creation of a Joint Intelligence Operational Command within the Pentagon that could possibly replace the Defense Intelligence Agency, the Times said.