Leicester agree compensation deal for Pearson

Returning: Nigel Pearson at Leicester in 2009

Nigel Pearson will be named as Leicester City manager within the next 24 hours after the Foxes agreed a compensation deal with Hull City to see his return to the East Midlands.

Pearson is believed to have had a compensation clause of £675,000 written into his contract, a sum equal to that agreed by Hull City when they secured the services of the 48-year-old from the Foxes seventeen months ago. Tigers' owner Assem Allam was holding out for a reported £1 million in compensation - for Pearson and his backroom team of Craig Shakespeare and Steve Walsh - but backed-down on Saturday to agree a compromise with the Asia Football Investments consortium, owners of Leicester City Football Club.

Allam's change in stance will pave the way for Pearson to return to Leicester, a club which has seen a complete transformation since he departed in June 2010. His efforts saw then-third tier Leicester promoted back to the Championship at the first attempt before a successful season in the second tier saw the Foxes within a penalty kick of a Wembley play-off final. Pearson's deteriorating relationship with Foxes then-Chief Executive Lee Hoos saw him depart amidst a desire from chairman Milan Mandaric to lure a big name to the club and attract new investors.

Whilst Pearson began his new project on Humberside, Mandaric sold Leicester City to Asia Football Investments, led by father and son duo Vichai and Aiyawatt Raksriakson who introduced their King Power brand as shirt and stadium sponsors before a renovation project at the now-King Power Stadium took place this summer. An indifferent start to the season saw Sven Goran Eriksson sacked as manager a month ago and King Power's search for a replacement has led them back to Pearson.

Pearson will sign a £1 million per year contract and be rewarded with a large bonus should he guide the Foxes back into the Premier League. Meanwhile, the Tigers are believed to have already approached Manchester United, to take reserve team coach Warren Joyce to the KC Stadium as Pearson's replacement.