A spokeswomen for the FFU has confirmed that an offer has been extended to the ex-Three Lions' head coach, but the Swede's representatives insist they are not happy with the terms
The Euro 2012 co-hosts have been searching for a new head coach since Oleg Blokhin announced he was moving to club side Dynamo Kiev.
Redknapp appeared to be their first choice, with the ex-Tottenham boss indeed admitting that he was close to joining before his current post in west London became available.
However, with the Englishman unavailable, the Ukraine football federation have now confirmed that they have instead opened talks with the Swede.
"An offer has been made, negotiations are under way," a spokeswoman told reporters.
The 64-year-old, who has had stints in charge of Lazio, Manchester City and Mexico as well as the Three Lions, is currently serving as a technical director for Thai club Tero Sasana.
Despite his current commitments it seems that the man who led England to both a World Cup and a European championship quarter-final is keen on the move, but is not content with the current terms being offered.
"We have already been in contact with the representatives of the Football Federation of Ukraine (FFU)," Eriksson's spokesman Carlos Carvalho added. "Eriksson would like to lead the Ukraine national team and try to get them to the World Cup 2014 to be held in Brazil.
"At the moment we're in a period of intense negotiations. I confess that so far the conditions proposed by the FFU do not meet our expectations. We seek a compromise."
With Roy Hodgson's men traveling to Ukraine in September 2013 for a World Cup 2014 qualifier, if Eriksson was to take the job he would not have to wait long before facing his old employers.