Allardyce will leave Sunderland after nine months at the Premier League club.
The 61-year-old replaces Roy Hodgson, who resigned after the surprise defeat by Iceland at this summer's Euro 2016 finals in France.
Allardyce, a former West Ham, Newcastle and Bolton boss, spoke to the Football Association last week and has been chosen ahead of Hull's Steve Bruce.
The only remaining issue to be settled is compensation to Sunderland, with Allardyce having a year left on his contract at the Stadium of Light.
The club issued a statement on Wednesday, saying it was "aware of the intense media speculation", but that Allardyce remained in charge "at the present time".
It added: "We share in the anger and frustration of our supporters and would like to assure them that we are working to conclude the matter in the best interests of Sunderland AFC."
Allardyce was present as Sunderland beat Hartlepool 3-0 in a pre-season friendly on Wednesday.
The FA board meets on Thursday, when it is expected Allardyce's appointment will be officially confirmed.
Both Sunderland and Hull had urged the FA to act quickly, with the new Premier League season less than a month away.
Allardyce was interviewed for the England job following Sven-Goran Eriksson's departure after the 2006 World Cup but Steve McClaren was appointed.
His first competitive game in charge will be a World Cup qualifier in Slovakia on 4 September.
Allardyce will become the 15th permanent England boss, the pinnacle of a managerial career that started at Blackpool in 1994 and has taken in 467 Premier League games - behind only Sir Alex Ferguson, Arsene Wenger and Harry Redknapp.
He has never won a major trophy but did secure promotion to the Premier League with both Bolton and West Ham, and won Division Three with Notts County in 1998.
As a player, Allardyce started at Bolton in the 1970s before spells at Sunderland, Millwall, Coventry, Huddersfield, West Brom, Irish club Limerick and US side Tampa Bay Rowdies before ending his career at Preston.
(BBC)
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