Cole has started just nine Premier League games since he swapped Chelsea for Liverpool in the summer of 2010.
The midfielder has played the majority of his games with the Reds in cup competitions and was sent out on loan to Lille last term.
Reds boss Brendan Rodgers deemed the 31-year-old surplus to requirements when he took over last summer and Cole is keen to go back to Upton Park, where he began his career back in 1994.
"I'm not sure if a deal has been totally agreed. I know there have been talks," Rodgers said after Wednesday's 3-0 Premier League win over Sunderland when Cole did not make the squad.
Queens Park Rangers manager Harry Redknapp, who managed Cole at West Ham, said he had tried to sign the 31-year-old but that the player was heading for the Hammers.
Cole will have a medical at West Ham on Thursday and the London club hope to have him registered before midday on Friday so that he can play in Saturday's FA Cup clash against Manchester United.
West Ham will not pay a transfer fee for the England international as Liverpool are prepared to cancel his contract.
The Merseyside club would also pay him a negotiated settlement in order to get his estimated £100,000-a-week salary off the wage bill.
The Hammers have completed the signing of Republic of Ireland Under-19 striker Sean Maguire from Waterford United on a two-and-a-half-year contract though.
The 18-year-old finished joint top scorer in the League of Ireland First Division in 2012, helping Waterford to gain promotion as runners-up.
Maguire, who scored 13 goals in 24 appearances, told West Ham TV: "In summer 2011 the Waterford manager brought me in for a couple of training sessions and gave me a chance in the first team and I took it.
"Here I am now at West Ham and it's a dream come true really.
"People tend to say my best trait is my movement so hopefully I can show that here. I haven't been told yet which squad I will be in but I presume I'll be going into the reserves so I'll try to work my way up like I did at Waterford."
Meanwhile, Chelsea have recalled Israeli midfielder Yossi Benayoun from his loan spell at West Ham.
"Yossi Benayoun has completed his loan spell at West Ham United and returns to Chelsea today," the club said in a statement on their website.
Benayoun, who last played for West Ham on November 11 due to knee trouble, has scored once for Chelsea in 11 appearances since he joined from Liverpool in 2010.
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