David Moyes has told Everton he wants to become Sir Alex Ferguson's successor as Manchester United manager.
The Goodison Park club confirmed that Moyes will depart when his contract expires this summer.
Minutes earlier, Manchester United appeared to signal that Moyes' appointment was imminent.
The Old Trafford club put two entries on their Facebook page that said: "Send your personal welcome to our new manager David Moyes".
United had denied a deal was done and said they did not know how the page was updated.
The page was later deleted.
Ferguson, 71, revealed his decision to step down on Wednesday after nearly 27 years in charge at Old Trafford.
Moyes, 50, in charge at Goodison Park since 2002, is out of contract at the end of the season.
Everton said in a statement: "Everton can confirm that David Moyes will leave the club at the end of the season.
"The manager met chairman Bill Kenwright early yesterday evening and confirmed his desire to join Manchester United.
"The chairman, on behalf of the club, would like to place on record his thanks to David for the massive contribution he has made to Everton since his arrival in March 2002. He has been an outstanding manager.
"During his tenure at Goodison Park, David has taken charge of the team on over 500 occasions including four European campaigns.
"Everton officials will start the search for a replacement manager immediately."
It is understood Everton have already drawn up a shortlist.
Wigan's Roberto Martinez and Swansea's Michael Laudrup are thought to top Everton's list of potential replacements should Moyes, as expected, be confirmed as United's next manager. Club captain Phil Neville, 36, may also figure in Everton's plans.
Everton want to make an appointment as quickly as possible. No details have been given on whether Moyes' backroom staff will join Man Utd.
United chief executive David Gill said the job was a unique opportunity for whoever takes over.
"It is a dream job," he told MUTV.
"The new manager will inherit a great squad and infrastructure off the pitch, with a great staff.
"He will be walking into a difficult situation in terms of the number of trophies, but the positive of also having the support of the Manchester United family."
Everton, who reached the FA Cup quarter-finals this season, are currently sixth in the Premier League table, six points adrift of Tottenham in fifth but five above Merseyside rivals Liverpool.
A number of high-profile football names believe Moyes is the right man to replace Ferguson, who won 38 trophies during his time at the United helm.
"He's cut from the same cloth," said former United captain Steve Bruce. "It wouldn't surprise me if he got the job and I'm sure he would be very successful.
"He's not had huge finances but he has still managed to put an Everton team together that comfortably finishes in the top 10."
Former United assistant manager Steve McClaren added: "He's a winner and has a work ethic similar to Sir Alex.
"He's also built a dynasty and legacy at Everton. He's waited many years for this opportunity and I hope he gets it."
Former England and Everton striker Gary Lineker said Moyes would be a "sensible" appointment but said expectations would be enormous.
"He is hugely respected within the game and he will instantly get the respect of the players, but it's the biggest pair of shoes you can follow," said the Match of the Day presenter.
"He will always be judged against someone with phenomenal success, but he will know that anyway.
"It is going to be extraordinarily difficult for the next boss of Manchester United because, if it goes wrong, the fans will let him know they are missing Sir Alex.
"However, you can still see the allure of the job. It is one of the three biggest clubs in the world, so it will always get big names wanting it."
Former United defender Gary Neville also backed Moyes as a successor to Ferguson.
"I don't know if he's going to be appointed, but I would welcome it," Neville, who won eight league titles at United, told Sky Sports. "It makes sense."
Former Liverpool and Scotland defender Alan Hansen thinks Moyes is the right man to replace Ferguson.
"David Moyes is the perfect choice," he told BBC Sport. "He has done an incredible job at Everton.
"He speaks well and knows the game inside out. I think the Manchester United fans will take to him."
But former England striker Alan Shearer believes the appointment of Moyes is a risk given he has not won a trophy during 11 years in charge at Everton.
"Anyone who has worked with David Moyes says great things about his man-management and his coaching," Shearer told BBC Sport.
"The only thing you would say is that he has not won a trophy at Everton.
"But I suppose anyone who goes into Manchester United is a big gamble because it is going to be one heck of a big pair of shoes to fill."
Former United manager Tommy Docherty said he would "feel sorry" for Moyes should he be appointed.
"If it is David Moyes, then I congratulate him and feel sorry for him," said Docherty. "How can you follow the impossible?"