The South Korea forward has been strongly linked with a move to Europe this summer, with the Black Cats considered strong contenders to land this signature.
But recent reports have suggested Ji could join Dutch side PSV Eindhoven, with the player keen to be assured to regular playing time.
It does appear, however, that the 20-year-old has agreed to sign at the Stadium of Light, with Asian media suggesting a £2.2million fee has been accepted.
"Ji Dong-won's transfer will inevitably leave a big hole in our roster. But for the sake of the player's future and for the development of Korean football, we decided to allow his move," Chunnam Dragons said on Wednesday.
Ji, who is set for a medical before the end of the month, added to Yonhap: "I had the impression that Sunderland really wanted me.
"I know there will be stiff competition for playing time, and my goal is to become the player that the team wants me to be in six months.
"I am also looking forward to playing against Ji-sung and Chung-yong, whom I both admire."