Sparky has a get-out clause in his current deal which makes him a free agent from June 1.
Former Wales chief Hughes and his backroom team of Eddie Niedzwiecki and Mark Bowen insisted on the clause when they took over at Craven Cottage last summer.
It is payback for them taking a significant wage cut from their time in charge at mega-rich Manchester City.
A Fulham insider told The Sun: "The public perception is that Hughes is tied to a two-year contract.
"There is an option for a further year after this but the break in service effectively makes the entire management team free to leave at the end of this month."