The dramatic developments come less than a week after the Lincoln City chief revealed that he has rejected the overtures of Town after a compensation fee had been agreed with the Red Imps.
This came after the League One club gave Huddersfield permission to talk to the 40-year-old, who said at the time that the Yorkshire club 'were not the right choice' for him.
Despite the knock-back, Huddersfield have retained their interest in Cowley, also linked with Sheffield Wednesday ahead of the appointment of Garry Monk - and a breakthrough has been reportedly forged.
Cowley's younger brother Nicky is likely to accompany him to the John Smith's Stadium.
Only last month, Cowley presided over Lincoln's 1-0 Carabao Cup win at Huddersfield in Jan Siewert's penultimate match in charge of the Terriers.
Huddersfield - who resume after the international break with a home derby with Sheffield Wednesday on Sunday - have won just once in all competitions since the end of November and are currently on a 17-match winless sequence.