In a crucial board vote set for Wednesday, Disney's largest shareholder, index fund manager Vanguard, has decided to back Disney's current board and CEO Bob Iger over Nelson Peltz's Trian Partners, according to a report from Bloomberg News citing anonymous sources familiar with the matter.

Vanguard, which owns 7.8% of Disney shares, is one of the key players in the shareholder meeting and its decision to support the incumbent directors could significantly impact the ultimate outcome. The move aligns Vanguard with BlackRock, Disney's second-largest shareholder with a 4.2% stake, which has also reportedly endorsed Disney's current board and CEO, as reported by The Wall Street Journal on Monday.

The news of Vanguard and BlackRock backing Disney's current management has sparked criticism from former activist investor Bill Ackman. He questioned the legitimacy of the reported voting outcomes, emphasizing that only the company and its advisors would have access to the accurate information. Ackman urged Disney shareholders to support Peltz's efforts, claiming he would bring additional value to the company.

While Vanguard's stance deals a blow to Peltz's ambitions to join Disney's board, the votes of other major shareholders, such as State Street and Geode Capital Management, remain undisclosed. Trian Partners, which controls 1.8% of Disney shares, has garnered support from smaller shareholders including Neuberger Berman and CalPERS.

Disney, in its bid to secure support for its incumbent directors, has enlisted the help of influential figures from the corporate and media world, including JPMorgan Chase CEO Jamie Dimon and Star Wars creator George Lucas.

Retail investors have until 11:59 p.m. ET Tuesday to cast their votes through phone or online platforms, with the shareholder meeting scheduled to commence on Wednesday at 1 p.m. ET.

Vanguard, when reached for comment by CNBC, declined to provide any additional information regarding its decision.

The outcome of this highly anticipated board vote will determine the composition of Disney's directors and potentially shape the company's future direction.