However, the insider made clear that it is "definitely not a split" and "they fully intend to get back together at some time in the future."
"The guys have been together for five years, which is an incredible run for any boyband," the source continued. "They fully deserve to have at least a year to work on their own projects. There is absolutely no bad blood between them and they are all 100 per cent behind the decision."
Should the Sun's report be accurate, One Direction will not move forward with touring their latest album.
Zayn Malik split from the group in early 2015, and later broke off his engagement from longtime fiancée – and Little Mix singer – Perrie Edwards.
As Radar previously reported, the pop group had been considering a reality show deal to find Malik's replacement.
When asked for comment on their alleged hiatus, a representative told the magazine: "We don't comment on speculation."