The source also went on to explain that Zayn Malik's departure from the group earlier this year had no influence on the group's decision to disband.
"This was the plan with or without Zayn. In fact, the band have been making amazing music and been incredibly happy without Zayn," the insider claimed.
"Of course they would have preferred that he had stayed in the band, but they would have taken this extended hiatus even if he hadn't left."
One Direction had only just premiered their new music video for 'Drag Me Down' on Friday (August 21), which sees them train at NASA before taking off to space.
The former X Factor finalists recently confirmed a show in more earthly surroundings, headlining the Apple Music Festival at London's Roundhouse on September 22.
The last show they currently have booked is on October 31 at Sheffield Motorpoint Arena.
Watch the video for One Direction's 'Drag Me Down' below: