General Motors Corp. is readying plans to ditch its fabled Pontiac, an 82-year-old division that last flourished selling sporty, muscle cars, people familiar with the matter said Friday.

During its heyday three decades ago, Pontiac was the launching ground for young auto designers and executives including John DeLorean. But its sales have tumbled 70% since their peak in 1978, and the unit in recent years has been a steady money loser.

GM...