Amazon is set to launch its enlarged, Kindle e-reader on Wednesday, All Things Digital reported today.

The electronic reader is being hailed as the potential savior of newspapers, and will provide a format that will convince reader of the economic value of online based reporting. With consumers paying for online subscriptions via the Kindle, newspaper companies could make massive savings on print and distribution

The larger Kindle is rumored to be the size of a standard piece of paper and would adopt a format similar to that of a traditional newspaper. The e-reader would also facilitate advertising, Philly.com reported. The enlarged Kindle follows a collaboration announced earlier this year between Gannett Co. and Plastic Logic Ltd. to release a newspaper based e-reader early in 2010.

The first generation of the newspaper targeted Kindle will likely be available only in black and white. However, reports suggest Apple is set to release a larger equivalent of the iPod touch later this year, which will display colour, video and will access the Internet, according to Philly.com

The present 6-inch model Kindle offers subscriptions to 58 newspapers and magazines.