Sources said his name has been shortlisted by IIM Bangalore's board of governors. The HRD Ministry is also believed to have given its final seal of approval. The appointments committee of the Cabinet has to clear his name.
Vachani is a professor in Boston University School of Management.
The present incumbent Pankaj Chandra was also in the contention, sources said.
Selection of candidates from overseas was made possible last year after the HRD ministry initiated a move to allow each IIM to shortlist its own candidates for director and chairman.