The temporary control points would be set up on four front lines in the east and south of the city to prevent escalation between the government forces and the Houthi rebels, the source told Xinhua on condition of anonymity.
The control points would be manned by liaison officers from both warring parties in accordance with a UN-sponsored cease-fire agreement reached in Stockholm in December 2018.
Abhijit Guha, the newly-appointed head of the UN monitoring mission, who arrived in Hodeidah last week, oversees the progress.
Hodeidah is the main Yemeni port city on the Red Sea and key lifeline entry of most Yemen's commercial imports and humanitarian aid.
The grinding war of more than four years has pushed over 20 million people to the verge of starvation.
Iran-allied Houthi rebels control much of Hodeidah while the Saudi-backed government troops have advanced to the southeastern districts.
The cease-fire deal was seen as the first phase toward achieving a comprehensive political solution to end the civil war.