Blanc told his club Girondins Bordeaux on Sunday he wanted to leave with one year remaining on his contract in order to take the reins of the national team.
"Girondins Bordeaux have been informed by Laurent Blanc that he wanted to answer favourably to the French federation (FFF)'s approaches to become the France coach," Bordeaux said in a statement.
"Girondins Bordeaux expect to hear from the FFF on the question of the compensation linked to the release of their coach."
A World Cup winner with France in 1998 although he missed the final through suspension, Blanc, who played for clubs including Barcelona, Olympique Marseille, Inter Milan and Manchester United, is nicknamed "the President" for his leadership skills.
The French federation is expected to officially unveil Domenech's successor on Thursday.
"I am pleased. The past, the personality, the charisma of Laurent Blanc correspond to the profile the FFF is looking for to strengthen the ambitions of the France team after the World Cup in South Africa," FFF president Jean-Pierre Escalettes said in a statement.
"In the coming hours, the FFF will make contact with the parties involved to define the conditions of a deal allowing Laurent Blanc to take the reins of the France team next season."
"He has a lot of experience at the highest level, he played in great clubs," said Bordeaux midfielder Alou Diarra.
"It's very good, it's a very good choice," he said.
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