Sources connected with the case tell TMZ the L.A. County District Attorney will file the case as early as Monday.
Lindsay is accused of stealing a $2,500 necklace (pictured above) from a Venice, CA jewelry store on January 22. Surveillance video from the store shows Lindsay with the necklace in question and there are photos of her wearing what appears to be the same necklace a week later.
If convicted ... Lindsay faces a maximum of three years in state prison.
Sources connected with Lindsay tell TMZ ... Lindsay says she'll fight the charge and she's sticking with her story that she took the jewelry on loan.
The case could also have a dramatic impact on her ongoing DUI case in Beverly Hills since she is currently on probation.
UPDATE: The D.A.'s office just issued a statement to an L.A. wire service that no decision has been made. TMZ reiterates -- Lindsay Lohan will be charged with felony grand theft.