The Ipswich Town boss, who led Ireland to the last-16 of the 2002 World Cup, has been heavily linked with a return to the position he previously held for six years.
"I'm not surprised (to be linked) because I did a good job last time," said McCarthy, who won 57 caps for Ireland.
"But Martin O'Neill is getting the job as far as I'm aware. That's totally nailed on. He's a shoo-in for it.
"He's ex-Celtic and is a damn good manager. My understanding is that he's got the job. Good luck to him, I'm delighted."
McCarthy revealed that his Ipswich contract had a clause that would have allowed him to return to Ireland, but that clause expired last summer.
The 54-year-old took charge of the Championship side last November following the sacking of Paul Jewell, and he insists he has no intention of leaving Portman Road.
"I've been linked it with it because of my success doing that job in the past," he said. "I've not courted it or fanned the flames at all. I'm not going to do that now.
"I was asked in here, when Giovanni was under pressure, do you fancy it? And I said 'yes I would at some stage', but I'm in a job and it's not the right time. I'm loving what I'm doing here.
"Martin O'Neill is out of work and he can walk straight into the job. I think he's perfect for them."