Thursday's ruling re-examines a 2013 judgement that upheld a colonial-era law, known as section 377, under which gay sex is categorised as an "unnatural offence".
There has been a very vocal campaign to decriminalise homosexuality in India.
Many activists are expecting the court to overrule its previous judgement.
They believe the court strongly indicated its stance on the matter, in a landmark judgement it made on the right to privacy in August last year.
It said then that "discrimination against an individual on the basis of sexual orientation is deeply offensive to the dignity and self-worth of the individual".
In 2016, when the court agreed to hear the section 377 petition once more, three senior judges said they felt the issue was a "matter of constitutional importance".
Thursday's verdict will be delivered by a five-judge bench headed by India's outgoing chief justice Dipak Misra.
What is section 377?
It's a 157-year-old colonial-era law which criminalises certain sexual acts as "unnatural offences" which are punishable by a 10-year jail term.
The law punishes, in its own words, "carnal intercourse against the order of nature with any man, woman or animal". While the statute criminalises all anal and oral sex, it has had a much bigger implication for same-sex relationships.
Activists have frequently said that the law has been used to harass members of the country's gay and transgender communities. Equal rights campaigners have also argued that the very existence of such a law is proof of discrimination based on sexual orientation.
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