A consultant with France's RMC radio, Fernandez, 55, is expected in Conakry in the next few days, to sign his contract and conduct his first news conference.
The Guinea Football Federation (FGF) has been looking for a replacement since Dussuyer quit as Guinea coach following their quarter-final exit from the 2015 Africa Cup of Nations.
BBC Sport understands that Fernandez, who managed Israel between 2010 and 2011, has been picked as the new Syli Nationale coach by the FGF.
Fernandez played 60 times for France and was a member of the side that won the 1984 European Championship title.
He also coached Paris Saint-Germain to the 1996 Cup Winners' Cup but his time in charge of Israel's national team was not so successful.
Fernandez was appointed in May 2010 to lead Israel in the Euro 2012 qualifiers but ended with a record of five wins, a draw and four losses in qualifying group F, eight points behind winners Greece.
The Frenchman also came in for a barrage of criticism from local media for failing to establish a stable squad and made frequent and unorthodox changes to his line-ups.
The much-travelled, vastly-experienced Fernandez has previously managed Spanish clubs Athletic Bilbao, Espanyol and Real Betis.
His managerial journey includes stints with Israeli club Beitar Jerusalem, Qatar's side Al-Rayyan and French club Reims.
Former France international Luis Fernandez is poised to take over as coach of Guinea and replace compatriot Michel Dussuyer.