Alex Marvez of The Sporting News first reported that Rathman will join the Colts and return to the league after a year absence. Marvez also reported that Indianapolis will name Kevin Patullo as the team's wide receivers coach.
Rathman served as the 49ers' running backs coach from 1997-2002 and 2009-16, but was not retained by current San Francisco head coach Kyle Shanahan. He also had coaching stints with the Detroit Lions (2003-05) and the Oakland Raiders (2006-08).
Now 55, Rathman was a member of two Super Bowl-winning teams with the 49ers from 1986-93 and finished his NFL playing career in Oakland.
Rathman will take over a Colts' ground game that ranked 22nd in the NFL last season in rushing yards per game (103.8).
He likely will not see the familiar face of Frank Gore, who will become a free agent next month. Gore, who led the Colts in carries (261) and rushing yards (961) last season, played under Rathman during his own run in the 49ers' backfield.
Robert Turbin and 2017 fourth-round selection Marlon Mack are also on the Colts' roster.
Patullo spent last season as an offensive analyst at Texas A&M, although he also has NFL coaching experience.
He served as an offensive assistant and quality control coach with the Kansas City Chiefs (2007-08) and Buffalo Bills (2010-11). Patullo also has served as an assistant wide receivers coach for the Bills (2012) and Tennessee Titans (2014) and as quarterbacks coach for the New York Jets (2015-16).