The transfer will give Rangers a much-needed injection of cash and reduce their wage bill as administrators look to cut costs at the club.

A statement on the club's official website read: "Rangers have confirmed today that a fee has been agreed with Busan but that negotiations on the transfer are still continuing."

However Busan revealed on their website overnight that they had signed McKay, and he would replace former Adelaide United defender Iain Fyfe.

As well as McKay, Busan also have three Brazilians on their books, and had to shed Fyfe to stay within the 3+1 foreigners rule.

"Busan I'Park have signed former Rangers and Brisbane Roar midfielder Matt McKay to replace Iain Fyfe," said Busan's official website.

"The 29-year-old is keen to be playing regular first team football and Busan are ready to offer him the chance to escape the troubles at Rangers."

Fyfe's next club is currently a mystery. His last appearance for Busan was in October when he was an unused sub.

Busan finished fifth in the K.League last season and are currently in pre-season training in Hawaii where they will today play a Melbourne Heart select side in the Hawaiian Invitational Tournament.

It is possible McKay may join his new team-mates for the tournament and may even make it in time for the game this afternoon.

McKay joined Rangers from Brisbane Roar in August for a reported $400,000 fee after captaining his former side to the A-League title.

However, the Australia midfielder, who had been voted his country's player of the year, made only three first-team appearances for Rangers.

The 29-year-old had a brief spell in South Korea in 2006 when he joined Incheon United on loan during the Australian close season.

Administrators have not announced any job cuts at Rangers since being appointed on Valentine's Day and have said redundancies are not inevitable, according to manager Ally McCoist.

The administrators have so far focused on probing recent financial dealings around the club, yesterday confirming that owner Craig Whyte had paid off an £18million debt to Lloyds Banking Group with money raised from future season ticket sales.