Mercedes are prepared to release Paddy Lowe from his period of gardening leave to join Williams before the start of the 2017 season, Sky sources understand.
Lowe, the world champions' technical chief, was placed on gardening leave in January and said he was "now looking forward to a new challenge".
Sky Sports News HQ understands Mercedes are willing to cut short Lowe's gardening leave once suitable terms are agreed.
Mercedes and Williams declined to comment.
F1's 2017 schedule, line-ups and changes
Lowe is expected to become Williams' senior technical figure following the departure of chief technical officer Pat Symonds in December.
The 54-year-old will also become a Williams director.
Lowe, who joined Mercedes from McLaren in 2013, was part of the Brackley outfit which won three consecutive Drivers' and Constructors' Championship doubles.
He began his F1 career at Williams in 1987 before switching to McLaren six years later.
James Allison, Ferrari's former technical director, has been heavily linked to an F1 return with Mercedes to effectively replace Lowe. The Englishman's gardening leave following his Ferrari departure last July is thought to expire in the summer.