The 50-year-old is in talks with the country’s top football officials and could be named Brazil’s new head coach as soon as Tuesday, according to news portal Lancenet.
It would be Dunga’s second spell in-charge of Brazil after guiding the team to 42 victories from 60 matches between 2006 and 2010, reports.
He led the Selecao to victory at the 2007 Copa America and 2009 Confederations Cup before being sacked after their quarter-final exit at the 2010 World Cup.
Dunga’s only coaching position since 2010 was a 10-month stint in charge of Brazilian Serie A club Internacional last year.
His chances are said to have been boosted by the appointment of his friend and former Selecao teammate Gilmar Rinaldi as Brazil’s technical director.
Scolari and his backroom staff resigned after Brazil’s failure to reach the World Cup final as hosts and pre-tournament favourites.
Their record-breaking 7-1 semi-final defeat to Germany was followed by a 3-0 loss to the Netherlands in the match for third place.