The Brazilian football federation has invited Corinthians' Mano Menezes to coach the national team after Muricy Ramalho could not accept the job due to his contract with Fluminense.
The federation said Menezes will announce his decision on Saturday.
Federation president Ricardo Teixeira said late Friday that Menezes fits into the plan to immediately revamp the national team.
"What determined the choice was the understanding that an immediate renovation is needed in the Brazilian national team," Teixeira said in a statement on the federation's website.
Teixeira said Menezes would kickstart the project on Monday by summoning the Brazilian squad for the Aug. 10 friendly against the United States in New Jersey.
The Brazilian federation said Menezes was in a list of three coaches the federation put together while in South Africa following Brazil's disappointing elimination to the Netherlands in the quarterfinals, and fits perfectly into the federation's project to revamp the national team for the 2014 World Cup in Brazil.
Menezes is set to replace Dunga, who was fired just days after the 2-1 loss to the Dutch.
"The most important thing in our selection was the common sense of the need of a philosophy of renovation," Teixeira said. "I have absolute confidence that this will be successfully done, culminating in 2014."
Menezes will have the difficult task of leading the team in the tournament which will take place in Brazil for the first time since 1950 and will add unprecedented expectations among fans in the football-crazy nation.
"The final goal is the 2014 World Cup," Teixeira said.
Brazil failed to get past the quarterfinals of the past two World Cups.
The federation said in its statement that Menezes earned respect for his work at Brazilian clubs Gremio and Corinthians, with a trajectory marked by balance and a desire to promote young talents.
Menezes led Corinthians to the Brazilian Cup title last year after helping the club return to the first division following relegation in 2007. He had also helped Gremio move back to the first division in 2005, and in 2007 he led the team to a runner-up finish in the Copa Libertadores, Latin America's top club competition.
Three-time Brazilian champion Ramalho told the federation he rejected the offer because Fluminense did not allow him to break his contract, which had just been extended until the end of 2012.
Teixeira said Ramalho told him he wanted to coach the national team, but Fluminense club directors blocked the move.
"Coach Muricy will continue with the club honoring his contract," Fluminense president Roberto Horcades said at a news conference.
Ramalho's initial contract with Fluminense would have ended later this year, but Horcades said both parts had already agreed to extend it until the end of 2012.
Ramalho had long said his ultimate goal is to coach Brazil, and before talking with Fluminense directors he had hinted he would accept the federation's offer.
"Who wouldn't want to coach the Brazilian national team?" he told ESPN Brasil's website.
Even Brazil President Luiz Inacio Lula da Silva had already commented on the man he thought was the new national team coach, saying he was "a good choice."
Other names touted for the position included World Cup winner Luiz Felipe Scolari and former Real Madrid coach Vanderlei Luxemburgo.
Scolari led Brazil to the World Cup title in 2002 and is the favorite for fans, but he just signed a two-year contract to coach four-time Brazilian champion Palmeiras and hinted he would not be available to the national team until 2012.