Leicester have confirmed they are in talks with Paulo Sousa about becoming their new manager following his exit from Swansea on Monday.
The Swans released a statement to confirm that following talks on Sunday evening, Sousa would be leaving the Liberty Stadium just a year after replacing Wigan-bound Roberto Martinez.
"Swansea City have parted company with manager Paulo Sousa by mutual consent," the statement said.
The move comes following a meeting between Swans chairman Huw Jenkins and Paulo Sousa over the weekend.
"Both parties agreed that the current speculation regarding the manager's future was harmful to the club and, as a result, Paulo was granted his request to speak to Leicester City about the vacant manager's job at the Walkers Stadium."
Leicester, who lost their manager Nigel Pearson to Hull City last week, have now revealed that talks with the Portuguese tactician are underway and it is thought a compensation package has been agreed with the Swans.
A statement from Leicester said: "Following his release by mutual consent with Swansea City FC, Leicester City confirmed that they have initiated talks with Paulo Sousa in regards to the vacant manager's job. "
Further updates will be provided in due course."
In the meantime Swansea are being linked with former assistant boss Graeme Jones, who joined Martinez at Wigan, Exeter chief Paul Tidsdale and Brighton manager Gus Poyet, who was interviewed for the job 12 months ago.