Dunga, whose real name is Carlos Bledorn Verri, previously
coached Brazil from 2006 to 2010, where he won the 2007 Copa America
and the 2009 Confederations Cup.
He was fired by the Brazilian Football Confederation (CBF) after
losing to the Netherlands in the quarter-finals of the 2010 World
Cup.
One source, who declined to be identified since the process is
underway, said Dunga has a good relationship with Gilmar Rinaldi,
who was named on Thursday as general manager for Brazil's national
teams.
Both players were part of the 1994 World Cup winning team.
The CBF and Dunga, 50, began talks early this week, a second source
said.
"He is the front runner in the list and things are moving forward
satisfactorily," a second source told Reuters.
"There were important meetings that took place in São Paulo, and
Gilmar is fine-tuning details already."
A new coach to replace Luiz Felipe Scolari is expected to be named
next Tuesday.
Scolari, who guided Brazil to their fifth World Cup title in 2002,
resigned as coach after the 2014 tournament where the hosts entered
as hot favorites but finished fourth.
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They were also humiliated by eventual champions Germany 7-1 in the
semi-finals and then lost the third-place playoff 3-0 to the
Netherlands.
Both sources dismissed recent local media reports that Tite, who led
Corinthians to the World Club Championship in 2012, and Sao Paulo
manager Muricy Ramalho were front runners for the job.
Dunga's last job was as coach of Internacional, where he spent a
great part of his playing career, but was sacked last October after
a fourth successive loss in the Brazilian league that left them
mid-table.
As coach of Brazil's national team, he led the team to 42 victories,
12 draws and six defeats,
(Writing and additional reporting by Guillermo Parra-Bernal; Editing
by Greg Stutchbury)
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