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SharePoint On-Premise Retention policy work fine, But by default destination Document library is "Drop of Library", how i can change retention policy destination Document Library "Report" instead of "Drop of Library"

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I am assuming your destination site is the same as the source. If so, this is not going to work because according to Microsoft support

It was as per design. If you try to move documents to a different location using Retention policy, you have to move it a library in a different site collection. Means your Report library should be in different site collection. Main idea of Microsoft is to have one Archival or Records center site collection for the whole organization.

If you are trying to move documents after expiration to a library in same site or site collection, you can use a workaround to start a workflow on expiration date which moves the document to your desired document library.

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