The former Ipswich boss was immediately installed as the favourite for the role following Martin O'Neill's departure earlier this week and his appointment is now expected to be formalised over the course of the weekend.
McCarthy is thought to be poised to put pen to paper on a two-year deal worth €1.2m.
The 59-year-old is expected to be joined by long-term assistant Terry Connor, who is currently working with England's U21 side, and Ireland's all time record goalscorer Robbie Keane.
Dundalk Manager Stephen Kenny is also believed to have been sounded out for the role.
McCarthy previously manager Ireland between 1996 and 2002, winning 43% of his 68 games in charge after replacing Jack Charlton at the helm.
The Barnsley-born former Ireland international successfully guided his country to the 2002 World Cup, where they reached the knockout stages, and he will now be tasked with doing the same with Euro 2020, with the qualifying draw due to take place on Sunday week.