Former England boss Eriksson is understood to be in advanced negotiations about returning to the international game with the Middle East minnows, The Sun Reported.
The 70-year-old and his representative are believed to have met with officials from the Iraq FA to discuss the move.
And Sky Sports claim those talks have gone so well that the plan is to finalise terms on a deal over the coming week before an official announcement is made.
Eriksson has managed 16 sides across club and country over the course of a managerial career which has seen him travel the globe in pursuit of work.
He started out in his native Sweden and really made his name as a top coach during spells in Italy with Sampdoria and Lazio.
England appointed him manager in 2001, and he went on to take the Three Lions to the quarter finals in two World Cups and a European Championship.
Eriksson then spent a year in charge of Manchester City before returning to the international stage for brief stints in control of Mexico and Ivory Coast.
An abortive spell in charge of Leicester followed before he left England in 2011 to spend four years working in the emerging Chinese Super League.
In that time
he has managed three separate clubs, the last being a year in charge of Shenzen
that came to an end late last year.