The former Socceroos coach walked away from the national job after helping Australia qualify for the World Cup.

The 52-year-old had hinted at a desire to return to club coaching stating he missed the day-to-day activity of club land.

The Sun Herald reports Postecoglou agreed to terms with Yokohama a fortnight ago during a meeting with club president Koichiro Furukawa in Melbourne.

Yokohama is part of the Manchester City football group which also owns Melbourne City.

Postecoglou is expected to spend time with Manchester City manager Pep Guardiola in January before the Japanese pre-season commences.

Meanwhile, FFA are yet to appoint Postecoglou’s replacement with reports suggesting Sydney FC coach Graham Arnold has already been offered the Socceroos job.

Arnold denied this at a press conference last week, but that hasn’t stopped Sky Blues chairman Scott Barlow from issuing a hands off letter to FFA.  

“We’ve made it clear to FFA that Graham is contracted. We expect him to honour his contract ... beyond that we haven’t really thought ahead,” Barlow said.

More to come.