Jordan is said to be in final negotiations with the university, with a formal announcement expected Thursday afternoon, The (Newark, N.J.) Star Ledger reported.
Jordan played at Rutgers from 1973 to 1977, helping the team make the Final Four in 1976.
He played in the NBA from 1977 to 1984 and has been an NBA coach three times, compiling a 257-343 records with the Sacramento Kings, Washington Wizards and Philadelphia 76ers.
He would take over a team still shaking from the departure of Mike Rice, who resigned April 1 after a video showed him verbally and physically abusing players.
Two players, Mike Poole and Jerome Seagears, have already asked for their release, and leading scorer Eli Carter made the same request Wednesday.
Rutgers last played in the NCAA Tournament in 1991.