Wolfsburg have agreed a €16 million fee for Juventus midfielder Diego, according to Bild.
Diego, 25, became a leading star in the Bundesliga with Werder Bremen after joining from Porto in 2006, but he has failed to live up to expectations in Italy following his reported €24.5 million move last summer.
Wolfsburg and Juve are said to have been in talks since Monday and it is claimed the player is now discussing personal terms.
FIFA agent Giacomo Petralito, an intermediary in the deal, has said developments are expected shortly.
"There should be some news in the next two days," he told Tuttomercatoweb. "It is beyond doubt that Wolfsburg like the player and there is interest, but in a couple of days we should have developments on a transfer."
Juventus are attempting to reshape the squad after a disappointing season in which they finished seventh in Serie A, and reports suggest they are looking to raise cash to fund a bid for Lyon star Michel Bastos.
Schalke are also said to be keen on taking Diego back to Germany.