The 62-year-old will reportedly be announced by Thursday, leaving his post at Fulham to take on one of the highest-profile roles in club football.
Hodgson will replace Rafa Benitez, who left Anfield in June to take up the position of Inter Milan manager in Italy.
The news seemingly rules Hodgson out of the running for England manager, if indeed the FA decide to part company with Fabio Capello.
- Football.co.uk staff
Source: DSG