After a day of talks with the Italian's advisors, FA officials were unable to wrap up all the details of Capello's contract but a spokesman for the governing body indicated that a deal had effectively been all but done.
The spokesman, Adrian Bevington, said Capello's appointment had been approved by the FA Board, subject to the successful conclusion of the contract negotiations.
"These will continue tomorrow. I want to stress that there are no problems and that we are going through the necessary process to reach a successful conclusion," Bevington added.
The former Milan, Real Madrid, Roma and Juventus coach spent Thursday at one of his homes in Milan awaiting official confirmation of his appointment as Steve McClaren's successor.
The details still to be resolved are understood to mainly concern the make-up of the new manager's backroom staff.
Capello was believed to have agreed a contract worth in excess of four million pounds (eight million dollars) a year up to the 2010 World Cup with a two-year extension as an option, presuming that England qualify for the finals in South Africa and perform well.
The 61-year-old reportedly wants to include long-serving assistant Franco Baldini in his backroom team and there were concerns within the FA about how this would would dovetail with the role of the organisation's current director of football, Sir Trevor Brooking.
Baldini however has indicated that the question of his involvement was not a deal-breaker.
Capello's path to what is the best-paid managerial job in world football was cleared when Jose Mourinho, the initial favourite to succeed McClaren, pulled out of the race earlier this week, having decided he would prefer a new challenge in club football.
In contrast, having achieved everything possible in the club game, Capello is at an age where he no longer craves the day-to-day involvement with players that many international managers miss.
His passion for the game remains undiminished however and he had made clear his enthusiasm for the "beautiful challenge" of managing England within 24 hours of McClaren being dismissed after a defeat by Croatia at Wembley ensured his team would not be going to Euro 2008.
Managerial luminaries including Sir Alex Ferguson, Arsene Wenger and Sven-Goran Eriksson have all endorsed Capello's credentials.This may be the light at the end of tunnel for England.
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