The former Brighton boss was always considered one of the favourites to replace Paolo Di Canio in the Sunderland hotseat and Sky Sports understands discussions have taken place.
Di Canio was sacked on Sunday night, the day after their 3-0 defeat to West Brom which left them bottom of the Premier League with one point from their opening five games.
It later emerged that senior Sunderland players had complained to the club's hierarchy about the fiery Italian's behaviour.
Kevin Ball has been appointed as caretaker manager and he guided Sunderland to a 2-0 win over Peterborough in the Capital One Cup on Tuesday night.
Ball has stated that wants the job on a permanent basis, and he will take charge of the team again this weekend when they face Liverpool.
Sunderland owner Ellis Short has insisted he will not rush the appointment, having sacked Di Canio after just 175 days and 13 matches in charge.
Oooo, this frying pan is a little warm, I wonder what the fire is like...- lee