The left-sided defender is set to undergo a medical ahead of signing a one-year contract with the club, per the BBC.
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The 33-year-old joined Ipswich from the Baggies on a two-year deal in 2024 but his time at the club has been hampered by injuries, limiting him to just 10 appearances.
He tore his ACL last summer, which ruled him out for the entire 2025/26 campaign as Kieran McKenna's side made a swift return to the Premier League.
Townsend made 216 appearances for Albion in six years at the club in his first spell.
The experienced defender is set to make a return to West Brom and play his football at The Hawthorns once again.