Chinese reports claim the 60-year-old Italian, who has not coached since the 2010 World Cup, will return to football to take charge of the mega-rich Super League champions
Titan and Sina Sports have reported that the South Korean coach, who has long been under pressure despite positive results, was dismissed before the team left Bangkok for their flight back to China. It is speculated that Lee addressed his players before their departure, revealing the decision.
The news comes as a shock following the big-spending Chinese champions' 2-1 win away to Buriram United, which clinched top spot in their AFC Champions League group and progress to the knockout stage.
There has been no official statement from Guangzhou at this stage, but they will hold a press conference at 14.00 local time on Thursday where the change is expected to be confirmed.
According to Titan, Lippi, 60, who has been heavily linked with the post in the past after admitting in March there had been contact, will arrive in Guangdong on Wednesday or Thursday and could be paid as much as €10 million (£7.9m) per season.
The former Juventus, Inter and Napoli boss has not coached since the 2010 Fifa World Cup where Italy crashed out at the group stage.
Titan also claims Lippi's assistant Narciso Pezzotti has been in China for the past few weeks and had a role in approving the signing of Borussia Dortmund's Lucas Barrios, who will arrive on June 1.
The ambitious outfit, who were the Chinese champions in 2011, are currently top of the Super League, one point clear of Guangzhou Fuli after 10 games.