Everton sacked coach Marco Silva on Friday (AEDT) after a dismal start to the season where they lost nine of their first 15 games including a 5-2 humbling at the hands of fierce rivals Liverpool.
Reports in British Media has linked former Blues gaffer David Moyes as favourite for the top job at Goodison Park with Cahill expected to be named his assistant.
Moyes, who led Everton for 11 successful seasons from 2002-2013, is believed by the club's top brass as the man to help return the Blues to the heights of his previous tenure.
Cahill was a fan favourite during his near decade long stint at the club between 2004-2012 with Moyes helping the Australian become a Premier League star.
The hard working midfielder scored 56 goals in 226 appearances for Everton and was even named the club's player of the season in 2005.
The Socceroos record goalscorer officially announced his playing retirement in March at the age of 39 before undertaking his UEFA A-Licence coaching studies.
The sacking of Silva has opened the door for what could be Cahill's first major coaching appointment.
"Everton Football Club can confirm that manager Marco Silva has left the club," Everton said in a statement.
"Majority shareholder Farhad Moshiri, chairman Bill Kenwright and the board of directors would like to thank Marco for his service over the last 18 months and wish him well for the future.
"Duncan Ferguson has taken temporary charge of the first team and will manage the side for the game against Chelsea on Saturday.
"The club aims to confirm a new permanent manager as swiftly as possible."
Silva was reported to have survived one round of emergency talks among the club's hierarchy after the home loss to Norwich City last month but his position became untenable following defeats by Leicester City and Liverpool.
Everton conceded five league goals against Liverpool for the first time since 1982, and the Portuguese coach conceded his players had buckled under the pressure at Anfield.
