The Mail on Sunday says O'Neill is ready to end his 10-month exile from the Premier League by taking over at Fulham.
O'Neill, who left Aston Villa last August, is interested in taking over the vacant manager's post at Craven Cottage and is a serious rival to the other bookmakers' favourite, Martin Jol.
The former Celtic manager has already held preliminary talks with Fulham and told friends he is itching to get back into the game after reaching a financial agreement with Villa over his acrimonious departure.
And he wants a club in the south so he can continue to live at his home in High Wycombe with wife Geraldine, whom he helped beat cancer in 2005.
O'Neill has been a regular visitor to Craven Cottage over the years when he has not been working and the thin management structure at the club - owned by Mohamed Fayed and run by chief executive Alistair Mackintosh - appeals.