Tim Cahill appears set to finally play in the A-League after reaching an agreement in principle to sign with Melbourne City for the upcoming season.

Fairfax Media understands City are on the cusp of signing Cahill as a guest player outside of the salary cap with sources suggesting a formal deal is close.

Football Federation Australia chief executive David Gallop confirmed a deal could be imminent after revealing lengthy meetings with Cahill and his representatives took place on Wednesday, with a view to sealing his move to Melbourne City.

"I met with his manager yesterday, I spoke to Tim last night. It's not appropriate to say more than positive talks are ongoing. I've said before, we'd love to have Tim playing in the A-League. We believe it's the right time in his career, he's got the opportunity to make a history-making appearance in a World Cup in Russia 2018," Gallop said.