The law is a major overhaul of EU copyright law intended to make sure that creators of creative content -- whether music, movies or news -- are paid fairly in a digital world.
A vote to be held at noon in the eastern French city of Strasbourg was considered by European Parliament members to be too close to call.
The two most disputed aspects to the reform are an effort to boost revenue for hard-up news publishers and a crackdown on non-copyrighted material on tech platforms such as Google-owned Youtube or Facebook.
Major publishers, including AFP, have pushed for the news media reform -- known as article 11 -- seeing it as an urgently needed solution against a backdrop of free online news that has decimated earnings for traditional media companies.
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But US tech giants and internet freedom activists are against the idea, calling it a "link tax" that will stifle discourse on the Internet.
They also argue it would only benefit well-known news providers to the detriment of independent and start-up news companies.
Resistance has been especially heated to Article 13: the proposal to make online platforms legally liable for copyrighted material put on the web by users.
Music legend McCartney as well as major music labels and film studios have lobbied politicians urging them to back the changes.
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But critics warn the reform will lead to blanket censorship by tech platforms that have become an online hub for creativity, especially Youtube. It would also restrict the usage of memes and remixes by everyday internet surfers, they say.
Wikipedia went down in at least three countries on Wednesday in a protest at the upcoming European Parliament vote.
"The directive would threaten online freedom and would impose new filters, barriers and restrictions to access the web," Wikipedia Spain said in its statement.
Thursday's parliament vote is not final, but only sets out the negotiating position of MEPs.
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There then follow negotiations with member states for a finalised law which Austria, holder of the EU's six-month rotating presidency, would like finished by the end of the year.
"This is a very difficult question," said Austrian Technology Minister Norbert Hofer in Vienna.
"We are trying to find a good solution, it is not very easy," he said.
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