Inverness Caledonian Thistle's Terry Butcher
has agreed personal terms to become Hibernian's new manager, BBC Scotland has learned.
Hibs are yet to comment but it is believed they hope to agree a compensation deal with their rivals.
Caley Thistle stress that they have had no request for permission to approach the 54-year-old.
And chairman Kenny Cameron says he has received assurances from Butcher that he has not spoken to Hibs.
The Edinburgh club's board met on Sunday to discuss the search for a new manager following Friday's departure of Pat Fenlon and immediately targeted Butcher.
Butcher, who Caley Thistle say talked to Cameron after taking training on Monday afternoon, has been offered a new contract by Inverness that has been lying unsigned for several months.
Cameron says he talked with Terry Butcher after training on Monday
The former England captain, who previously managed Coventry City, Sunderland, Motherwell, Sydney and Brentford, joined Inverness on an 18-month contract in January 2009.
Butcher, who first moved to Scottish football when joining Rangers in 1986, was unable to prevent Caley Thistle being relegated from Scotland's top flight but won promotion the following season.
He rejected an offer to succeed Keith Hill as manager of Barnsley in January and led Caley Thistle to a fourth-place finish in the Scottish Premier League last season.
Butcher's present contract with Caley Thistle ends in June and it is believed that a compensation figure of between £100,000 and £150,000 could be required should he switch to Hibs.
Despite BBC Sport learning that Butcher had agreed personal terms, ICT chairman Cameron said he was unaware of such a move and insisted the claim was "totally untrue".
"There has been no approach to this club for Terry Butcher's services and we look forward to him continuing the excellent job he has been doing in Inverness.
"Speculation on managerial vacancies is, to an extent, inevitable.
"But to state as a fact something that is totally untrue is unworthy of BBC Scotland."