The vlogger, brother of fellow online celeb Zoella, will be the first YouTuber to appear on the BBC One series.
Joe, who has over 8 million subscribers, is also a film-maker and author and appeared on other TV shows including Release The Hounds.
A source said: "Joe has done extremely well for himself on YouTube and after a lot of negotiation he’s agreed to give Strictly a go. He thinks this will be a good launch pad to go.
They added to the Metro newspaper: "Zoe, Alfie and the rest of his YouTube friends are going to be there supporting him in the audience every week – even if he’s not the best dancer his fanbase is a force to be reckoned with."
Joe joins a growing list of celebs rumoured for Strictly 2018.
Also said to have signed up for the cast this week are BBC News journalist Kate Silverton and This Morning’s Dr Ranj.
A source told The Sun of Kate's signing: “Kate has made no secret of how much she loves Strictly so being able to take part is a dream come true.”
While an insider revealed to the Mirror of Dr Ranj's appointment: "He’s a housewives’ favourite on ITV daytime so he’s sure to have big support when he takes to the dancefloor."
The trio join previously rumoured celebs including two former popstars.
Pussycat Dolls star Ashley Roberts and Steps singer Faye Tozer are both said to have agreed deals to compete for the glitterball in 2018.
The pair are expected to join Capital FM radio DJ and TV presenter Vick Hope on this year's line up.
A spokesperson for the BBC commented on the reports: “We don’t comment on speculation and the full line-up is coming soon.”
It's expected the first celebrity will be officially announced on Monday.
For now, other rumoured names Strictly Come Dancing bosses could sign this year include TV personality Anneka Rice, football pundit Chris Kamara and Radio DJ Maya Jama.
Hollyoaks star turned Oscar winner Rachel Shenton and The Chase's Mark Labbett have also been tipped to take part in Strictly Come Dancing 2018, alongside former England footballer David James and X Factor star turned TV host Rylan Clark-Neal.
Strictly Come Dancing begins on BBC One in September with its pre-recorded launch show.
The series will then start its live episodes a few weeks after.
It Takes Two will also be back, airing weeknights with host Zoe Ball.