AC Milan owner Gerry Cardinale is moving to close the deal before Crystal Palace can match their approach.
Sky Sport Italia confirmed on Wednesday that Iraola is in the driving seat for the role, with Gazzetta dello Sport corroborating the frontrunner status. The two parties have been in dialogue since mid-May, with meetings already having taken place in London involving Cardinale and Zlatan Ibrahimovic, who has been handed increased authority over football operations following the mass departure of Allegri, chief executive Giorgio Furlani, sporting director Igli Tare and technical director Geoffrey Moncada.
A contract framework is ready. The proposed deal is worth over €3 million per season with bonus clauses tied to Champions League qualification — structured over two or three years with an automatic extension if European targets are met. Cardinale and Ibrahimovic have also offered the Basque coach assurances of significant investment in the squad across the next two transfer windows.
Iraola, 44, leaves Bournemouth this summer after two remarkable seasons at Dean Court in which he guided the club to two consecutive top-half Premier League finishes and European qualification last season, despite selling key players in every window. His tactical intelligence, offensive philosophy and ability to build from the back with a high-pressing structure have drawn widespread admiration.
Crystal Palace, who are searching for a successor to Oliver Glasner, have also made contact with Iraola. That competition is now accelerating Milan's desire to move as quickly as possible.
In addition to the coaching appointment, Gazzetta dello Sport and transfer journalist Nicolò Schira have reported two names for the vacant sporting director position. Ralf Rangnick, currently Austria's national team manager and contracted through the World Cup, is one candidate — Cardinale and Ibrahimovic flew to Vienna for preliminary discussions with the 67-year-old, who has an extensive track record as both a coach and sporting director at clubs including Schalke, Hamburg, Hoffenheim and RB Leipzig. His contract with Austria expires after the tournament.
Ramón Planes, currently at Saudi Pro League club Al Ittihad and previously Barcelona's sporting director, is the alternative option.
Oliver Glasner is a secondary coaching candidate being monitored as a fallback, but Iraola is the clear first choice.