"The contract has been signed by both sides," one fashion insider said. "He is becoming the new director at Yves Saint Laurent."
Other sources said the appointment was to be officially announced in the coming week. Paris Fashion Week runs from February 28th to March 7th.
A spokesman for the PPR group, which owns YSL, declined to comment.
It will be Slimane's second stint at the legendary fashion house, having worked there in the late 1990s as head of the menswear collection.
Slimane, whose father is Tunisian and mother Italian, is returning to the fashion industry after several years away.
He has been based in Los Angeles during an extended sabbatical from the fashion world, working mainly in photography. A lot of his work is in black and white -- and much of it features the rock milieu.
He is still only 43, having made his mark at Christian Dior between 2000 and 2007, where he is generally acknowledged to have revolutionised menswear.
During his time there, he made Dior Homme each season's must-see show.
A rock fan and artist, Slimane drove an androgynous look of skinny suits and tight low trousers that found its imitators not just in the fashion world but spread into the rock world that so fascinates him.
Stars Mick Jagger and Pete Doherty have gone on stage in Dior Homme, while designer Jean-Paul Gaultier once said he could not do better than Slimane.
Even the legendary Karl Lagerfeld shed some 45 kilos (90 pounds) to be able to slide into a pencil-thin Slimane suit.
The look Slimane developed was much copied by mass-market designers across the world and even influenced the design of women's clothes.
At the height of his fame, some young followers even adopted Slimane's distinctive Tintin-like quiff.
Slimane is recognised not just as a talented designer but as a master showman, with a gift for creating buzz around his collections.
He sent groups of models out onto the catwalk instead of having them walk out one by one. He carefully stage managed every event, even hiring rock groups to provide the music for his collections.
Slimane will replace the Italian designer Stefano Pilati, sources said.
Considered by his peers as one of the most gifted designers of his generation, Slimane stepped down from his post at Dior saying he wanted a chance to design for women.
Although he has never designed a full-scale women's collection, during his time at Dior Homme he did produce creations for women in limited quantities, which were much sought after.
In any case, according to the trade paper Women's Wear Daily, the old guard at YSL believe in his talent.
With the move to YSL, Slimane is coming full circle.
He first arrived there in 1997 as head of the menswear collection, leaving in 2000 when the Italian house Gucci bought it and brought in its house stylist Tom Ford.