Encarnacion has been out of action since he was hit on the right hand by a pitch from Boston right-hander Daniel Bard on Sunday afternoon.
The 29-year-old swung a bat on Thursday for the first time since the incident and the reports came back positive. Encarnacion hit off a tee and via soft toss, which is the first step in getting back onto the field.
"You're able to see a little bit more definition in the hand," Blue Jays manager John Farrell said. "The strength has improved over yesterday. As the swelling has gone down, the increase in strength is there and we fully expect him to be in the lineup tomorrow."
Encarnacion has spent a lot of his time at designated hitter this season, but with Toronto opening a three-game Interleague series at Atlanta, he will take over duties at first base.
The Dominican native is hitting .279 with 17 home runs and 43 RBIs in 54 games this season. He also has a .348 on-base percentage, 10 doubles and a .926 OPS.