Eminem and Wham! are also in contention for the 2017 festive chart-topper, the Official Charts Company said.
Sheeran's single Perfect is just ahead of River, a new entry from rapper Eminem, which also features the British singer-songwriter.
Wham! track Last Christmas is in third position.
The countdown for the top spot kicked off on Friday and ends at midnight on Thursday December 21.
The figures are based on pre-orders and early sales data up to midnight on Friday night.
It comes after Sheeran scored a charts double with a number one single, Perfect, and a number one album, Divide.
George Michael campaign
Despite its enduring appeal, Last Christmas has never reached Number One, and this year a campaign, backed by Andrew Ridgeley, has been launched to get the song to the top one year after singer George Michael's death.
Other singles include AC/DC's For Those About To Rock (We Salute You), at 22, following a fan campaign in remembrance of band member Malcolm Young, who died last month.
Michael Ball and Alfie Boe's all-star charity single Bring Me Sunshine is currently at 37, and Ralph McTell's Streets Of London, reworked with Annie Lennox and the Crisis Choir to raise money to support thousands of people facing homelessness, is at 41.
Sheeran track Perfect has been released in lots of different guises, including with Beyonce and most recently with Andrea Bocelli, but all the versions count towards his front-running position.
The Christmas top 40 will be counted down on The Official Chart on BBC Radio 1 on Friday December 22 from 4pm.