His former Chelsea team mate, Steve Clarke, who was also an assistant manager at the London club, will be his new assistant, the BBC said.
Di Matteo, who won the Champions League as Chelsea manager in 2012, is expected to have his appointment confirmed by the club when new owner Tony Xia formally takes charge following approval by the Premier League and Football League.
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(Reporting by Neville Dalton; editing by Clare Lovell)
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