The former Falkirk and Hibernian manager is expected to be announced as the replacement for Terry Butcher, who left for Easter Road last month, at an 11am press conference.
The former Celtic defender looks to have secured the position ahead of Alloa boss Paul Hartley and former Kilmarnock manager Kenny Shiels, who this week stated that managers who had previously played with the Old Firm were favoured by Scottish Premiership clubs.
Hughes has been without a job since being sacked by Hartlepool at the end of last season.
The 49-year-old failed to keep Pools in League One after taking over when they were nine points adrift in November.
Hughes had instigated a revival and secured the manager of the month award in February following a seven-match unbeaten run, but his side then failed to score in eight games and were relegated despite a four-game undefeated finish to the season.
Hughes began his managerial career with Falkirk, taking them up to the top flight and keeping them there for four seasons, his final game a 1-0 Scottish Cup final defeat by Rangers in 2009.
He led Hibs to a European place in 2010 in his first and only full season but was sacked in the October of that year after a poor run of results stretching back from the previous campaign.
The Edinburgh-born manager will take on a side sitting second in the league and still competing in both cup competitions having won five consecutive matches. Caley Thistle face Hearts in the League Cup semi-finals at Easter Road on February 2 before facing Clyde or Stranraer in the William Hill Scottish Cup the following week.
His first game in charge will be at St Mirren Park on Saturday.