Paddy Lowe left Mercedes in early January
Lowe joined Mercedes from McLaren in 2013 and has overseen three consecutive World Constructors' Championship victories at the team.
But he stepped down from his role as executive director last month and began a period of gardening leave.
However, the BBC are now reporting that he will join the board at Williams and be given responsibility for all the technical deals of the F1 team with one source calling the completion of the move 'a formality'
Paddy Lowe spent 20 years at McLaren before joining Mercedes
"Discussions are still ongoing and until a signature is on a bit of paper nothing's a formality, but it would be good for Williams if they can get him," team co-founder Sir Patrick Head told the BBC.
Should Lowe sign a deal at Williams, it would signal a return to the team with whom he started his career in F1.
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After graduating from Cambridge with a degree in engineering, Lowe was appointed joint head of electronics at Williams in 1987.
He spent six years there before moving to McLaren where he spent two decades.
Paddy Lowe helped guide Nico Rosberg to a world title at Mercedes last year
But now Mercedes are charged with replacing him after just four years and former Ferrari man James Allison is said to be one of the front-runners for the role.
The team themselves however are not yet ready to confirm any progress on a deal to replace Lowe.
"We ask for your understanding that we cannot comment publicly on confidential contractual details," a spokesman said.
"We have said that we will communicate further information in due course and this remains the case."