AS Saint-Etienne set to win the race for Sunderland forward
Khazri has been the subject of interest from clubs across Europe, with Ligue 1 sides in particular eager to strike a deal.
Stade Rennais, where Khazri excelled on loan last season, made a renewed push to land a permanent deal last week but it is Saint-Etienne who have been closest to meeting Stewart Donald's valuation.
According to L'Equipe, a fee has now been agreed.
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Hide AdThey will reportedly pay around 7 million euros for the 27-year-old, potentially rising to 10 with add-on clauses.
Khazri is said to have agreed a four-year deal to move to the ambitious side.
It will represent a shot in the arm for Sunderland's finances as Jack Ross moves to further strengthen his squad.
Strikers and another central defender are his top priorities as the pre-season campaign begins.