The Football Association has an agreement in principle with Luiz Felipe Scolari to become the next England manager, BBC Five Live understands.
Scolari has knocked England out of the last two major tournaments
No contract has been signed but talks between Scolari and FA chief executive Brian Barwick in Lisbon on Wednesday are believed to have gone well.
Brazilian Scolari, 57, is currently under contract as Portugal manager until after the World Cup finals.
Scolari himself had earlier said: "I have nothing to say. Go away."
But the former Brazil coach later attended a dinner with Portuguese football federation officials and reportedly revealed the length of the deal he had been offered by Barwick.
REACTION TO THE NEWS
I don't know if Scolari is better than the Englishmen but all you can do is go on reputation
Ex-England coach Don Howe
"He laid out contracts for five and seven years on the table," Scolari is quoted as telling The Times.
"The official said, 'We should speak English'. I said, 'Speak what you want.' I didn't speak Arabian in Arabia, but I am learning English," he added.
The FA earlier confirmed that it had been in discussion with Scolari, who led his native country to World Cup glory in 2002.
"We were speaking to Felipe as part of the process of recruiting the next coach and that process continues," said Barwick after flying back to London.
Scolari is thought to have a gentleman's agreement with the Portuguese FA not to commit himself to another job until his current deal runs out in July.
But it is understood part of the FA's talks in Lisbon were about waiving this arrangement.
Barwick flew back in to London's Heathrow on Thursday but made no comment on when the FA would make an announcement on the situation.
An FA spokesman told BBC Sport that talks with the Portuguese FA started in February this year.
The spokesman said: "I can confirm that the FA formally approached the Portuguese Football Federation back in February.
"The FA chairman Geoff Thompson spoke to the PFF president Gilberto Madail for permission to speak to Mr Scolari and that permission was granted."
The FA board is due to meet again on Thursday 4 May and had hoped to be in a position to finalise its selection by then.
Scolari's case is believed to have been championed at the highest level within the FA by Arsenal vice-chairman David Dein.
News that he has been offered the England job will come as a blow to those fans who favour a British appointment.
The FA has also held talks with Middlesbrough boss Steve McClaren, Bolton's Sam Allardyce, Alan Curbishley of Charlton and former Celtic boss Martin O'Neill.
Last week, the FA claimed it had completed its interview process, and McClaren - part of Eriksson's current England coaching team - was seen as the favourite.
But Barwick's trip to Portugal seems to support claims that the FA board was unable to reach a firm decision.
Agreeing personal terms with Scolari should not be an issue as the estimated £3m annual salary on offer would represent a big pay rise for him.
But the FA's approach raises the prospect of Scolari facing England in Germany this summer as manager-elect, possibly in the quarter-finals.
He has helped to knock England out of their past two major tournaments - with Brazil in the 2002 World Cup quarter-finals, and with Portugal at the same stage in Euro 2004.
Scolari is a double winner of the Libertadores - the South American championship - and took hosts Portugal to the final of Euro 2004, where they lost to Greece.