O’Neil, 43, came in to replace Liam Rosenior, who in turn went to fellow BlueCo club Chelsea, only to jump ship six months later.
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The former Wolves and Bournemouth boss has now been named the new Ipswich manager following Kieran McKenna’s shock resignation.
Now, according to French outlet Onze Mondial, former Celtic manager Nancy is in pole position for the Strasbourg job.
The 49-year-old has been out of work since leaving Parkhead just eight games after he was appointed, losing six and winning two.
Nancy recently spoke of his desire to manage in Ligue 1 to RMC Sport, saying: "Now, I want to come to Ligue 1, if there is an opportunity. I am not the one who decides, but I am ready."