Tim Cahill is set to return to Australia with reports indicating a transfer to Melbourne City is on the cards.

The 36-year-old Everton hero has foregone the opportunity to re-sign with Chinese Super League club Hangzhou Greentown and it is understood that a big-money move to the A-League is next on his agenda.

Cahill has been contemplating a homecoming for some time now and according to Football Federation Australia CEO David Gallop, a shift to Australia's top flight seems a likelihood.

"We're continuing to have talks," Gallop said.

"At this stage I can't say much more than that talks are positive. We'd love to have Tim in the A-League, we know what he'd bring to the A-League and we also know his important place in the campaign to make it to Russia 2018."

It is believed that Cahill has his eye on making a fourth World Cup and would like to do that by competing in the A-League.

An Instagram post from the ex-Millwall, New York Red Bulls and Shanghai Shenhua attacking midfielder confirmed his exit from Hangzhou, opening the door to an Aussie return.

"This has been an incredibly difficult decision to leave Hangzhou Greentown," he wrote.

"I have felt that I am part of a great family ever since the club president Mr Wu gave me an opportunity back in February. I've really enjoyed being around so many young, talented Chinese footballers. It is inspiring to see their development and there are only good things ahead for this club.

"The passion of the fans at every game, home and away, has been amazing as well and I've loved being part of it all. This decision is based on me wanting to be with my family. The President offered me an amazing contract to stay and I know he will continue to make this club great.

"I will miss him and my Chinese brothers and I wish this football club all the very best."