Manuel Pellegrini is now the leading candidate to succeed David Moyes as West Ham manager, Sky Sports News understands.
The 64-year-old Chilean, who guided Manchester City to the Premier League title in 2014, has been lined up to replace Moyes, who left the club earlier this week at the end of his six-month contract.
West Ham met with representatives of Pellegrini on Wednesday but Sky Sports News understands his wages demands are an issue for the Hammers.
Reports in Chile claim Pellegrini has already signed a contract with West Ham, although Sky sources understand a deal is yet to be agreed between all parties.
West Ham co-owner David Sullivan insists the club is "very close" to appointing their new manager.
"I would like to reassure our supporters that we have left no stone unturned in selecting the individual we believe is the right man to take West Ham United forward," Sullivan said.
"We have followed a process that is progressing entirely to plan and are now very close to reaching an agreement.
"This is an exciting time for our football club. We are preparing to appoint a manager who has a proven record of success at the highest level of the game."
West Ham have also been linked with Newcastle boss Rafa Benitez as well as Paulo Fonseca, who committed his future to Shakhtar Donetsk by signing a new two-year deal on Thursday.
Sky sources understand the Hammers are still interested in Benitez, although Newcastle are confident of keeping the Spaniard at St James' Park.