Souness told Virgin Sport: "What happened [was] Michael Knighton appeared in Glasgow, he had an option for Martin Edwards.
"I think it was 75 per cent of Man United that Martin Edwards' family had. He was getting out.
"There was a meeting with lawyers and it was agreed that David [Murray] would buy Man United and they shook hands on it and went to bed.
"And what was going to happen I was going to manage Man United, when Fergie was having a very difficult time."
Souness added he even went to bed after the meeting thinking he was going to be appointed Manchester United manager.
That was before Sir Alex Ferguson managed to win a trophy at Old Trafford.
Souness concluded: "I went to bed thinking I was going to be the next manager of Man United.
"That would have gone down well wouldn't it!"