Hughes has been out of work for six months and has been earmarked as the man to succeed Hodgson at Craven Cottage.
The former Wales and Blackburn manager is eager to return to work and knows that a high profile job will not be available once Hodgson takes over on Merseyside.
Owner Mohamed Al Fayed is keen to build on Fulham’s Europa League success and is prepared to offer the new manager transfer money, having sold his famous Harrods for £1.5 billion last month.
Fulham have already signed Switzerland defender Philippe Senderos from Arsenal and are also in talks with Aston Villa midfielder Steven Sidwell in a £3 million pound deal.
Meanwhile Roy Hodgson could be named as the new Liverpool manager by next weekend. Despite having interviewed several candidates including former Real Madrid coach Manuel Pellegrini, Hodgson is believed to be the most outstanding candidate.