The move comes after a succession of stories linking the province's construction industry to scams, cost overruns, criminal groups like the Mafia and illegal political donations.
Charest spent several hours huddled behind closed doors with his caucus at the legislature Tuesday.
While the premier chose his words carefully upon emerging from the meeting, one caucus member dropped hints to reporters about what the next announcement will be and when it will happen.
"It will probably come after tomorrow's (Wednesday's) cabinet meeting," said Henri-Francois Gautrin.
"I think people will be satisfied."
Gautrin replied, "Yes," when asked whether the government had reached a decision about whether to hold an inquiry. Gautrin, who has already expressed his own preference for a probe, again responded, "Yes," when asked whether he was pleased with the decision.
Until now, Charest has consistently resisted demands for an inquiry.
He has repeatedly brushed aside such requests by saying he has created a provincial anti-corruption unit and introduced reforms to political financing and municipal contracting.
But the changes have not quelled the political furor. Charest's government has not only become deeply unpopular with the general public but also faces a growing backlash within its ranks.
The premier's own speechwriter recently quit, saying he could no longer justify the absence of an inquiry. Five members of a riding association resigned near Montreal, and an organizer in western Quebec also quit.
Now the governing Liberals are staring down a party convention this weekend where the inquiry is expected to be a hot, divisive topic of discussion.
The inquiry announcement could pre-empt such a family feud.
But the Opposition says it isn't expecting much from Charest.
One member has already said he suspects the premier will simply come up with some diversionary tactic — a "thingamajig" — aimed at pacifying the public.
In the legislature on Tuesday, Parti Quebecois Leader Pauline Marois demanded to know whether this would be the inquiry Quebecers have actually been demanding: one that is public and independent and with a broad mandate.
Charest sidestepped the question. He has previously hinted he is considering an inquiry held partly behind closed doors.
"When the government is ready to make an announcement it will make an announcement," he said.
Charest also faced charges from his opponents that, thanks to the two-year delay, public funds have continually been wasted on inflated construction contracts.
"For two years, the Quebec Liberal party and its leader have refused, resisted," Marois said.
"How many hundreds of millions have been wasted to protect the image of the Liberal party?"
Demands for an inquiry began in 2009 amid reports not only of rampant corruption in the construction industry but also of illegal political contributions from well-connected businessmen.
The scandals reached the provincial level with reports of illegal party donations from engineering firms.
That's when Charest introduced several reforms. But the calls for an inquiry continued growing — especially as the Liberal government became embroiled in allegations of favouritism and influence-peddling.
Charest's minister responsible for family policy was accused of favouring friends with contracts to run publicly subsidized daycares.
Then that minister, Tony Tomassi, was forced to resign in 2010 after reports he was using a personal credit card supplied by a private company that had received government money.
Now Tomassi faces criminal charges. There have also been charges laid against a handful of municipal officials near Montreal and construction industry figures.
In recent months, the controversies had shown some sign of abating — but that was before an explosive report from the provincial anti-corruption unit was leaked to the media.
A senior figure in that unit, Jacques Duchesneau, has since suggested a two-stage inquiry. The first half, to be held behind closed doors, would hear evidence; the latter half, to be held in public, would focus on finding policy solutions to the current problems.
Duchesneau says that approach would get witnesses talking more freely, while allowing ongoing police investigations to proceed uninterrupted.
Members of the Charest government welcomed the proposals from the ex-Montreal police chief; in recent weeks, they suddenly softened their tone on an inquiry and said they were studying Duchesneau's proposal.