The renowned bowling spearhead, whose speed saw him nicknamed "White Lightning", is expected to oversee Australia's attack on their tour of Sri Lanka later this year.
He could then stay on for the summer series against South Africa, the Sydney Daily Telegraph said, filling the vacancy left by Craig McDermott who stepped down as bowling coach at the end of the World T20 in India.
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Cricket Australia, who have drafted in ex-Tasmania fast bowler Adam Griffith to help out on the tour of the West Indies in June, have yet to confirm the appointment.
Donald took 330 Test and 272 one-day international wickets during an illustrious career for South Africa that spanned 10 years.
He is credited with helping the development of speedsters Morne Morkel, Dale Steyn and Vernon Philander and has worked in the past with Australian fast bowler Mitchell Starc in the Indian Premier League.
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Donald, who has previously coached with England, New Zealand and South Africa, would only be a temporary appointment, the Telegraph said.
Cricket Australia are still considering a full-time replacement for McDermott, with their former Test fast bowler Jason Gillespie, who is head coach at English county Yorkshire, one of their top targets.
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