Local media reported widely that Hartley had missed out and that Jamie George, his England understudy, would join Ireland's Rory Best and Welshman Ken Owens in the battle for the hooker's jersey on the 10-game tour.
The news will be a huge blow for Hartley, who was selected in the initial squad for the Australia tour four years ago but then missed out after being banned for abusing the referee in the Premiership final.
Hartley, who has led England to successive Six Nations titles, would become the third successive England captain to miss out on Lions selection following Chris Robshaw and Steve Borthwick, who is now the Lions forwards coach.
Instead, Hartley will captain England on their two-test tour of Argentina, where he is likely to be accompanied by centre Jonathan Joseph, another surprise omission.
Gatland is expected to include up to 15 Englishmen, including Jack Nowell, who has struggled to nail down a starting spot under Eddie Jones, and Ben Te'o, the rugby league convert who has started one test in union but won a further seven as a replacement.
All-action prop Kyle Sinckler, who has yet to start a test for England, is also set to travel, as is versatile back Elliot Daly.
The inclusion of the muscular Te'o is an indication of how Gatland sees the Lions can get to the All Blacks with an all-power game. Such a philosophy would also explain the suggested surprise inclusion of Jamie Roberts, despite the crash-ball specialist centre losing his place in the Wales team.
Sam Warburton is set to be named captain for the second time, despite losing the Wales captaincy to Alun Wyn Jones, who is also set to be included in a strong group of locks.
The squad also looks particularly blessed in the back row, where Billy Vunipola, Sean O'Brien, CJ Stander and Taulupe Faletau look certainties.
There will be little in the squad to celebrate for Scotland, with fullback Stuart Hogg the only certainty and possibly only two others included, despite the Scots beating Wales and Ireland in this year's Six Nations.
The last Scot to start a Lions test was prop Tom Smith in 2001.
(Editing by Amlan Chakraborty)
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