Gatland, who coached Wales to the World Cup semi-finals last autumn, will become the second New Zealander to lead the Lions on tour after Graham Henry 11 years ago.
As was the case with Henry, Gatland's task will be to mastermind a Test series triumph over Australia Down Under.
Wales' double Six Nations title and Grand Slam-winning supremo would have been confirmed in the Lions role earlier this year.
But matters were put on hold while he recovered from fractures to both his heels after he fell at his holiday home in New Zealand's Waikato region.
The Lions had initially wanted Gatland to relinquish his Wales role for a year in order to concentrate on tour preparations, although it would now appear he will be in charge for Wales' autumn Test appointments with New Zealand and Australia at the Millennium Stadium.
"We still haven't signed anything yet, but it's very close," Gatland told the Sydney Morning Herald.
"And if I do take the position I will be seconded to the Lions for 10 months, but they've allowed me to be involved in the All Blacks Test (against Wales) for that week, and the Australian week."
Rob Howley, who was appointed Wales caretaker coach for their recent tour of Australia, seems set to continue in that post for November games against Argentina and Samoa, plus the 2013 Six Nations campaign.
"I won't coach the Samoa and Argentinian weeks or be involved in the Six Nations," added Gatland, who is poised to arrive back in the United Kingdom this weekend.