Real Madrid's move to reappoint Carlo Ancelotti as their manager is at an advanced stage, with the Everton boss set to replace Zinedine Zidane at the Bernabeu.
One well-placed source says the deal for Ancelotti, who previously coached Real between 2013 and 2015, to return to the club is "99 per cent" done.
One outstanding issue is the compensation the Spanish side will pay to Everton, who appointed the 61-year-old in December 2019, although an agreement is understood to be close.
The Everton board will meet on Tuesday night to discuss possible replacements for the departing Ancelotti.
Sky Sports News also understands that the Everton board met last week to support the veteran Italian head coach with his plans for next season, however, since then Ancelotti told the club he wanted to leave.
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The move has developed quickly over the past two days, with Real president Florentino Perez personally leading negotiations following the departure of Zinedine Zidane.
The former Real player quit his post after seeing his side fail to win a trophy this season. Zidane said on Monday he chose to leave because the club "no longer has the faith in me I need".
During his first spell at the Bernabeu, Ancelotti led Real to victory in the 2014 Champions League final against rivals Atletico Madrid, as well as Copa del Rey, UEFA Super Cup and Club World Cup glory that year.
However, he was sacked in 2015 after ending the season without a major trophy, after which he went on to coach Bayern Munich and Napoli, before joining Everton.
He steadied the ship at Goodison Park after replacing Marco Silva mid-season, and then oversaw the Toffees' push for European qualification this campaign.
However, Everton's season was undermined by their consistently poor home form - they won just six matches in their own stadium in the Premier League - which ultimately saw them finish 10th.
Ancelotti has been linked with a return to Real for several weeks, but last month he dismissed those reports as "not true".
"This is good publicity for me to be linked with Real Madrid but it is not true," he said. "I am really happy to stay here.
"We have difficulties of course, but I feel good at Everton and my target is to make Everton better and better every year."
The transfer window opens on June 9 but after seeing early promise fizzle out, what do Everton need to do this summer?
Which positions are Everton targeting?
Everton will be looking to provide more cover for Dominic Calvert-Lewin this summer following the limited impact of Josh King after his January move from Bournemouth.
The club will make a decision on the future of forward Moise Kean, whose successful loan spell at Paris Saint-Germain was agreed without an option to buy.
The Merseysiders are keen to prolong goalkeeper Robin Olsen's stay with his own loan agreement from Roma at an end. The Sweden international deputised well for Jordan Pickford when called upon this season.
Carlo Ancelotti has also targeted a successor for club captain Seamus Coleman since last summer, with Norwich right-back Max Aarons on their shortlist and available for around £30m.
Theo Walcott has made a permanent switch to Southampton but Everton will also likely offload Yannick Bolasie this summer to make way for another attacking wide player to provide competition across the forward line.