The former Schalke midfielder has struggled to secure a place in Mauricio Pochettino's team and has opted to leave White Hart Lane for a return to the Bundesliga with Hamburg.
The 23-year-old, who has three years left on his contract with Tottenham, is in Germany to have a medical after the two clubs agreed a season-long loan deal.
Holtby, who joined Spurs from Schalke in January 2013 and spent the end of last season on loan with Fulham, has been recently linked with a move to a number of Premier League clubs including Aston Villa, Everton, Crystal Palace and QPR.
The midfielder, who was also eligible to play for England, has played three times for Germany but failed to make their World Cup winning squad for Brazil.
Two other players on their way out of White Hart Lane are youngsters Tomislav Gomelt and Souleymane Coulibaly, who have both moved to Bari.
Gomelt, 19, joins the Italian Serie B side on a season-long loan while Coulibaly, also 19, has signed permanently.
Striker Jonathan Obika has also left Spurs after signing for Swindon Town for an undisclosed fee.
The 23-year-old, who made five appearances for the Robins during a loan spell in the 2010/11 season, has put pen to paper on a two-year deal at the County Ground.