Gareth Southgate is in the process of finalising a four-year contract with the Football Association having been formally offered the chance to succeed Sam Allardyce as England manager on a permanent basis.

The national side’s interim manager was interviewed by the FA’s five-man selection panel at St George’s Park on Monday and impressed in a three-hour meeting. He has been offered a deal through to 2020, with a break clause after the 2018 World Cup in Russia that can be triggered by either party, on a salary of around £1.5m a year, which is considerably less than that awarded to his predecessor.

However, the 46-year-old is understood to accept that, as an internal candidate, he will command a lower basic salary. The wage on the table is considerably more than the £500,000 he earned when overseeing the under-21s and will include considerable potential for bonuses which would apply should England progress. He is the only candidate with whom the governing body has spoken this week.

His first game will be a friendly against Germany in Dortmund on 22 March before a World Cup qualifier against Lithuania at Wembley four days later.

The FA had been expected to make an announcement after a meeting of its board at the end of the month, but may confirm the appointment at the start of next week. Southgate’s representatives will continue negotiations but agreement is believed to be close. The makeup of the manager’s backroom staff is still to be finalised, with the new man keen to retain Steve Holland as his assistant having worked closely with Chelsea’s first-team coach with the under-21s.

The Premier League leaders have no objections to Holland taking up a position either on a full-time or part-time basis, combining his duties with his work alongside Antonio Conte at Stamford Bridge. Yet Tottenham have made it clear they would be unhappy for the coach to do both jobs – there have been no other objections from other clubs – given that his position with the national team would probably see him working closely with a number of Spurs players. That politically awkward situation would have to be resolved.

Southgate had been reluctant to step up into the role following Roy Hodgson’s departure post-Euro 2016, but sensed he had little choice once Allardyce’s tenure ended after only 67 days in September. He was initially appointed to oversee the senior side for four matches and took seven points from World Cup qualifiers against Malta, Slovenia and Scotland to ensure England go into the winter break two points clear in their group.

The FA was impressed with the way in which he handled himself on and off the pitch throughout that spell in charge and even Spain salvaging a 2-2 draw at Wembley in the final minutes last week did not damage his prospects of securing the role on a permanent basis.

The national setup was intent upon following formal procedure, and Southgate was interviewed by the FA’s chairman, Greg Clarke, the chief executive, Martin Glenn, and the technical director, Dan Ashworth, while the League Managers Association chairman, Howard Wilkinson, and the former England left-back Graeme Le Saux also offered input. They unanimously agreed that the former Crystal Palace, Aston Villa and Middlesbrough player, who won 57 caps over a nine-year international career, was the right man.

Southgate has made clear his vision for the next four years and persuaded the panel that his team will play a progressive and clear style of football, with their progress in the four games to date a taster of what could come. The FA was equally impressed by his willingness to make the bold decision to drop Wayne Rooney, his captain, for the qualifier in Ljubljana in September, a decision which ignored the player’s reputation and standing and was based, instead, on his lack of form.

He must still tackle the thorny issue of players’ free-time during international get-togethers following recent exposés involving Rooney, the vice-captain Jordan Henderson and Adam Lallana, though Southgate – who will offer his opinion on who should succeed him with the under-21s – is far from daunted by that prospect.