Gordon Strachan has chosen his former Aberdeen team-mate as his No.2 and the SFA is expected to formally announce the appointment on Monday.
Strachan still intends to add a third member to the Scotland coaching team and will approach his preferred candidate in the coming days.
Among those said to be in the frame is Gary McAllister, who Strachan worked closely with during their time together at Leeds.
Both McGhee and the No.3 will work for the SFA on a part-time basis.
McGhee and Strachan have been close pals since their Pittodrie playing days in the 1980s. McGhee was on the shortlist to get the Scotland job in 2008, but lost out to George Burley.
At the time he was enjoying a successful spell with Motherwell, but left there for what became a deeply disappointing 18 months at Aberdeen.
After a year out of management – during which he watched games in and around London for previous Scotland boss Craig Levein – he took over at League Two side Bristol Rovers.
He was dismissed by them on December 15, but has been given a quick return to the game by his old friend.
Both Strachan and McGhee will continue to live in England and commute north for all international duties.