Carlo Ancelotti's legal team has reached an agreement with Napoli over the termination of his contract, paving the way for his appointment as Everton manager.
The 60-year-old, who was sacked by the Serie A club on December 10, is currently in his native Italy and preparing for his move to the UK. Sky in Italy are reporting Ancelotti is set to meet Napoli representatives to sign documents that will conclude his contract.
Sky Sports News understands that his official appointment at Goodison Park may not take place until Saturday before their home match against Arsenal.
Ancelotti will be in the stands at Goodison for the Premier League fixture before being officially presented to the media on Monday.
Therefore Duncan Ferguson, who achieved victory over Chelsea and a draw at Manchester United, prior to Wednesday's Carabao Cup exit at the hands of Leicester on penalties, will continue his role as interim boss for the Arsenal game.
Ancelotti has been offered a four-and-a-half-year contract and is set to take charge of his first game against Burnley on Boxing Day, according to Sky in Italy.
The Italian is set to be assisted by his son Davide Ancelotti and Ferguson, having been given assurances that there will be money to spend in the January transfer window.
Sky Sports News broke the story on Monday that Ancelotti reached an agreement in principle to become Marco Silva's successor following talks on Merseyside earlier in the day.