The Sunday Telegraph said the sign was hanging outside the Terracotta Room, on the first floor of Downing Street.
Miss Emin is said to have donated the work to the Government Art Collection.
The artist's last neon entitled I Never Stopped Loving You, which was installed on the seafront in Margate, sold for almost £59,000 when it went for auction in October.
Listed building The Telegraph says the Terracotta Room is often used for hospitality purposes and will be visible to those who climb Number 10's main staircase - famous for its adjacent wall of pictures of former prime ministers.
Rooms leading off of it include the White Room and a study used by Margaret Thatcher.
Emin, who won the Turner Prize with her unmade bed exhibit, said in February, she said she would be installing the neon in a newer room and on plastic, rather than screwed to the wall, as it was a listed building.
She said the Downing Street piece would not feature any X-rated slogans, which have appeared in past works.
He neon light installations usually spell out heartfelt messages.
"It has to relate to different people on different levels because of all the dignitaries and world leaders and religious groups who go to Number 10," she said.
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