Brian Laws feels Sheffield Wednesday are a 'step closer' to signing Darren Potter on a permanent basis from Wolves.
Potter scored twice in 17 appearances while on loan at Hillsborough last season and the midfielder has been told he can leave Wolves following the club's promotion to the Premier League.
The Owls have been locked in talks with Wolves chief executive Jez Moxey regarding a deal, but have yet to agree a fee.
However, Laws has revealed Wolves want the Owls to agree personal terms with Potter first - something the Championship club are close to doing.
"It's a step closer." Laws told the Sheffield Star.
"We are in negotiations with the player and his agent. We hope to conclude it by next week.
"We are getting clear communication from Wolves. I have spoken at length with Jez Moxey about putting a deal together; he suggested that we agree terms with the player first before we go any further."