West Ham are in "very serious negotiations" with Olympic authorities about moving into the 2012 stadium, says Sports Minister Richard Caborn.
Work has already started on the 2012 stadium in Stratford
The Hammers have long been linked with a move to the stadium, in nearby Stratford, after the Games end.
"There is a very serious negotiation going on between West Ham and the Olympic authorities about the stadium," said Caborn on Friday.
The talks were between Hammers chairman Terry Brown and senior Olympic figures.
Caborn added: "Talks are going on about whether they could do a similar thing to Manchester City when they took over the Commonwealth Games stadium in 2002."
There is no way we are looking to move there
Tottenham's sporting director Damien Comolli
Two parties are reportedly keen on taking control of West Ham - one led by London-based Iranian businessman Kia Joorabchian and another by Uefa executive committee member Eggert Magnusson.
Both those parties are said to be in favour of the move to the 2012 stadium but Caborn said he was not backing one bid for the club over another.
"I've have not had any contact with either of the reported bidders at any point - nor would I if they approached me as this would be totally inappropriate."
Meanwhile the talks over moving to the new stadium represent the latest step in a large U-turn by officials.
In October 2004, before London was even awarded the Games, the city's mayor Ken Livingstone said: "Sadly West Ham won't get the stadium. We will scale it down to around 25,000 seats for an athletics facility."
A year-and-a-half later, in March 2006, Livingstone again insisted the stadium would not be used for football, saying: "The deal we made is that it's an athletics stadium and we have a legally-binding contract which is more like an international treaty."
However, in April, Olympics organising committee chairman Lord Coe claimed "no doors are open and no doors are closed".
Coe added: "We have never ruled out a Premiership club but we have always made it very clear that a legacy for track and field is a serious part of the Olympics in London."
The presence of a running track has already led to West Ham's London rivals Tottenham ruling out a move to the stadium.
Sporting director Damien Comolli revealed: "There is no way we are looking to move there.
"All grounds with a track have a poor atmosphere, attendances are down and clubs say moving there was a mistake."