The Arsenal and former Republic of Ireland international, who has acted as caretaker-manager since the departure of George Graham three weeks ago, was formally offered the job yesterday morning by the Leeds chairman, Peter Ridsdale.
However, before he was willing to put pen to paper, O'Leary requested details of the overall package Leeds were offering, including personal terms and the amount of cash available for transfers.
Having stumped up pounds 1m a year to secure Graham's services, there should be little problem with O'Leary's contract and Ridsdale said yesterday that there was "no difference" between the two parties over a transfer fund.
Using the two-hour talks it took for Graham to conduct negotiations over the Leeds job as a guide, the Elland Road club had hoped to make an announcement by yesterday evening, but there were problems contacting O'Leary's advisor, who was in court all day in his official capacity as a lawyer.
However, discussions were expected to take place last night and a statement is expected to be made through the Stock Exchange this morning.
It would mean O'Leary would become Leeds' 17th postwar manager, having secured a draw and two one-goal defeats in his three matches in charge.
"We have offered David the job and, though an announcement is unlikely tonight, we hope to conclude a deal tomorrow," Ridsdale said. "This is a big club and it is only right that we should sort everything out properly."
It is thought that O'Leary has been offered a three-year contract which doubles his present salary.
Howard Wilkinson, Graham's predecessor as Leeds boss, has urged O'Leary to accept the challenge, providing "a career in management is what he wants."
After originally saying he did not want to become a No 1, the Irishman has since changed his mind, although he said he would not accept a deal just for the sake of it.
"I am prepared to say no to this job if it is not right for me - it's as simple as that," he said. "Just because Martin O'Neill has decided to stay at Leicester I just can't take the job like that. I have got to know the workings of it. It is not my fault that the last three weeks have not turned up Martin O'Neill.
"If the offer that is put to me is right I can only come to one conclusion but I want to hear what the chairman has to say."
The English pair, Garry Haylock and Mark Robins, each scored as Panionios Athens beat Apollon Limassol 3-2 in the European Cup-Winners' Cup.
Milenco Spoliaric put Apollon into the 1-0 lead after 13 minutes, but Antonis Sapountzis equalised for Panionios with a free-kick in the 24th minute and a header from Haylock made it 2-1 a quarter of an hour later.
Spoliaric's second, from a 30-yard free-kick, put the Cypriots on level terms again in the dying moments of the first half but Robins, the former Manchester United striker, rose to meet a centre from Kent Bergessen for the 57th-minute winner.
The dispute between Uefa and the company hoping to initiate a European Super League has entered its next round.
Media Partners International (MPI), the European sporting rights firm which is backing the setting-up of a Super League, has lodged a formal complaint with the European Commission against Uefa and its members, whom it charges with abusing their dominant market position and violating European Union competition laws. MPI said it has taken the action to protect clubs which want to join the Super League from possible Uefa sanctions.
As the Sheffield Wednesday striker, Paolo Di Canio, was preparing for today's disciplinary hearing at Bramall Lane to answer a misconduct charge arising from his push on referee Paul Alcock during the game against Arsenal last month, Alcock was insisting yesterday that although he had considered retirement following the incident, he would carry on in the game.
"I thought on the journey home about whether I really needed the pressure of this particular incident and I have thought a couple of times since over the last two or three weeks about whether I needed to carry on," he said. "But at the end of the day I am not going to let an incident like that stop me refereeing."Reuse content