Sky Sports reports the deal is set to go ahead for roughly £2 million.
While the Premier League transfer window is shut, players can still move out of clubs in the top division.
And the 27-year-old midfielder is set to join Sheffield United in the Championship.
Norwood was on loan at Fulham last season, playing 41 times and helping the club secure promotion.
He will join his new club on an initial loan, before a permanent deal is done in January for a two and a half year contract.