The Premier League strugglers are set to confirm the 39-year-old's appointment on Thursday.
Silva, who has previously coached at Olympiakos and Sporting Lisbon, will replace Mike Phelan, who was sacked on Tuesday with the club bottom of the table.
Vice-chairman Ehab Allam insisted the Tigers required a "fresh approach" after announcing Phelan's dismissal.
The decision to sack Phelan less than three months after he was appointed to a permanent role has been met with some criticism by supporters, who are likely to make their feelings clear in Saturday's FA Cup third-round clash with Swansea.
But Allam, whose family are continuing efforts to try to sell the club, said in a statement that the change was inevitable after the Tigers' promising start to the new campaign began to fade.
Allam wrote: "Mike initially took on the role at a difficult time last summer, inheriting a small squad that had lost a number of players to injury, and with the transfer window already in full swing
He would also go on to lose a number of key backroom team members through no fault of his own.
"Despite the difficult circumstances, the team made a positive start to the season and money was made available to strengthen the squad ahead of the transfer deadline with a significant investment made in the signing of six new players.
"However, results have been on the decline since that time and although there have been some positive performances in recent weeks, we sit bottom of the Premier League and I felt now was the right time to take a fresh approach and give this club and squad of players the best possible chance of retaining Premier League status.
"I expect to have a new management team in place ahead of the weekend."
Silva played professionally in Portugal as a full-back but made only two top-flight appearances during his career.
He was appointed director of football at Estoril immediately after retiring in 2011 before becoming coach of Sporting in the summer of 2014.
The club won the Portuguese Cup and finished third in the league but he was sacked within days of winning the cup, reportedly for not wearing an official club suit during a match in an earlier round.
Just over a month later he took over at Greek giants Olympiakos and led them to a 43rd national title before quitting at the end of the 2015-16 season, citing personal reasons.
Manchester United manager Jose Mourinho described Silva as a "kid friend of mine" in November 2015 and expressed his hope that Silva's Olympiakos would progress in the Champions League at the expense of Arsenal.
Source : PA