Reports said Koeman agreed to leave PSV Eindhoven for a three-year deal, which includes guiding Valencia for the remainder of this season.
Valencia spokesman Juan Domenech refused to comment but said the club would issue a statement on its Web site later in the day.
Koeman would replace Quique Sanchez Flores, who was fired by the club on Monday following a 3-0 loss at Sevilla, the club's fourth defeat in five games.
Valencia is tied for third in the Spanish league with 18 points, four points adrift of leaders Real Madrid, which it hosts on Wednesday night. Reserve team coach Oscar Hernandez will lead the team against Madrid at the Mestalla stadium.
Koeman was under contract at PSV, which he guided to its 20th league title last season, until 2008.
PSV has scheduled a press conference for 8 p.m. (1900 GMT) local time, but would not reveal the reason. Reports suggested that Valencia reached a financial agreement with the Dutch club as compensation.
The 44-year-old Koeman played for FC Barcelona and starred in the Netherlands' 1988 European Championship win. He also coached at Portuguese side Benfica and guided Ajax to the Dutch league and cup double in 2002.
Jose Mourinho, Marcello Lippi and Fabio Capello were some of the names linked to take over following the exit of Sanchez Flores, who guided Valencia to third and fourth-place finishes in his two full seasons at the club.
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