A group has set up the 'Forever Hibernian' campaign and is readying itself to launch a takeover bid.
It plans to form a co-operative which will give fans an equal say in how the club and its Easter Road home are run.
An initial plan has already been rejected by former Kwik-Fit tycoon Farmer after he raised concerns about tax and investment complications.
But discussions are on-going and fan spokesman and former player Paul Kane insists the Edinburgh side's faithful will not give up easily.
In a statement Kane said: "It is a step forward and we are over the first hurdle.
"We met with Sir Tom Farmer a couple of weeks ago and put in a proposal. That has been rejected at this stage, but the door has not been closed."
Farmer, 73, bought Hibs in 1991 to protect it for the Leith community after former Hearts chief Wallace Mercer's launched his attempt to merge the capital clubs.
However, the multi-millionaire has little interest in football and for much of his tenure has left the day-to-day running of the club to chairman Rod Petrie.
But a succession of unsuccessful managerial appointments culminated in the club's relegation to the Scottish Championship two months ago, heaping pressure onto the boardroom boss.
Petrie has now handed over many of his powers to new chief executive Leeann Dempster but that has not satisfied angry supporters.
More than 1500 fans gathered outside Easter Road last month to demand Petrie's sacking but now Kane says the supporters are taking matters into their own hands.
"We are now drawing up a proposal for a Newco Hibernian Fans Co-Operative to own the club and the stadium," explained the retired midfielder, who made almost 300 appearances for the club.
"The key point is the fans will own a 51 per cent majority shareholding through a membership scheme and we will attract finance for the other 49 per cent.
"We have already talked to potential investors in the business community who are Hibs supporters as well as other potential investors.
"We know we are going in the right direction and can reach an agreement with the club owner with both parties acting in good faith.
"The current owner acknowledges the club is entering a new era and we are confident we can establish common ground.
"Sir Tom Farmer has always said he saved Hibs for the community. Now is the time to establish his legacy for Hibs with the fans at the very heart of the club.
"It is also crucial both sides act in an open and transparent manner. We are busy making sure we get the right model and no doubt there will be adjustments regards the membership scheme, details of the co-operative and trust etc.
"We are working with the Hibs Supporters Association and all the people involved, putting in a lot of effort in the background, are Hibs people with one common goal - Forever Hibernian.
"We will present more details to the fans as soon as we can in the near future about the membership scheme. Overall we are in for the long haul.
"Meanwhile football clubs know they are in a new era of openness and transparency where they have to involve and respect the fans - especially with social media where their views cannot be ignored.
"The Hibs support has had serious concerns about how the club has been run by the current board and chairman. They want radical change as was seen at the rally at Easter Road on June 7. Since then we have come up with our first proposal. There were some problems which we feel we can rectify. Now it is stage two with the new proposal.
"There is now a hard-headed realism in Scottish football. There are few if any sugar daddies out there who are going to come in and buy the club for millions. But we are confident we can now build a new future for Hibs with the fans forever at the heart of it."