The pair reportedly is in the early stages of a serious romantic relationship after a long friendship.
Neither Packer nor Kerr have denied the report nearly a week after first being approached by reporters.
But it is understood to be a sensitive matter given their recent marriage breakdowns, which they announced just 45 days apart.
Kerr was married for three years to the actor Orlando Bloom and with whom she has a two-year-old son.
Orlando Bloom and Miranda Kerr (Bruce Glikas/Getty Images)
Kerr hails from the same country town as his ex-wife, Gunnedah, in northwest NSW.
James Packer is understood to have given Kerr business advice when she launched a range of beauty products several years ago.
And both their respective families holidayed together at luxury resorts in Tahiti last year.
A friend of Kerr's told Woman's Day, which was once owned by the Packer family: "Miranda may come across as an Earth Mother but she loves the high life and James can provide the sort of lifestyle and security very few could give her.
"I couldn’t be happier for her — this year’s been pretty difficult for Miranda. Her career seems to have hit a slump and she was totally devastated by the split."
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