Lyon coach Alain Perrin has reached agreement to quit the seven-time French champions, club president Jean-Michel Aulas announced on Monday.
Aulas confirmed that discussions were under way with Lille coach Claude Puel to take over, with a decision expected in the next 48 hours.
"Perrin is going. We have reached agreement for him to go under conditions which suit us both. The agreement will be sealed on Tuesday morning," said Aulas during a press conference to announce the signing of Cameroonian midfielder Jean II Makoun from Lille.
Perrin led Lyon to the French league and Cup double this season.
His contract had been due to run until 2009, but he had run-ins with the coaching staff.
Aulas said: "If I take this decision it's because there were a number of reasons, a bad balance between the coach's possibilities and the ambitions of the club.
"There also has to be a harmony between the technical staff and the coach. It wasn't found.
"He (Perrin) obtained titles, including the double, but managing is foreseeing. Even if results were achieved, some results were not."
Lyon bosses have said they are looking for a coach with an enlarged mission aimed at helping the team progess in the Champions League. The multiple French champions have never made the semis in Europe's elite competition.
Aulas confirmed talks with Puel, but stressed "no decision has been taken".
"We've been trying to persuade him for a long time. He is very interested in our proposal but it's up to his club to decide and that hasn't been achieved yet. Negotiations are at full steam."
Puel, 48, has two years left in his contract with Lille who finished seventh in last year's French league.