According to the Telegraph, Mr Setchell is in line to receive a knighthood or be admitted into the Royal Victorian Order in the next honours list. Guy Thorpe-Beeston, the obstetrician who helped with the royal birth, is also expected to be rewarded.
The Royal Victorian Order is given by the Queen to people who have served her, or her monarchy, in a personal way. These may include officials of the royal household, family members or British ambassadors who have helped organise a state visit abroad.
A Buckingham Palace aide confirmed, "An honour is coming their way, as a sign of the Queen's gratitude. It is looking like a knighthood or an RVO. All the talk from the people who know is, the bigger the honour the better."
Mr Setchell, the Queen's surgeon/gynaecologist, retired from the NHS in 2008, but continues to practice privately and in a royal capacity. He plans to retire at the end of this year.
He was on hand to look after Kate when she suffered from hyperemesis gravidarum at the beginning of her pregnancy, before delivering her baby boy at the private Lindo Wing of St Mary's Hospital in Paddington on 22 July.
He also delivered Sophie, Countess of Wessex's two children, Lady Louis Windsor and James, Viscount Severn, and cared for Sophie following her ectopic pregnancy in 2001.
Mr Setchell, who will turn 70 in October, has joked that he might be persuaded to return to work to deliver any other babies William and Kate might be planning.
"Marcus says he will retire after the baby is born but because he knows they are planning more children, he will probably have to take time out of his retirement to deliver those too," a source close to Marcus told the Mirror.