Lyon sacked coach Pierre Sage on Monday, the day after their French Ligue 1 draw at lowly Nantes, a source told AFP on Monday.
The weekend result left Lyon sixth in Ligue 1, four points from the Champions League spots just after the halfway mark through the season.
Under the 45-year-old Frenchman, Lyon were also on the verge of securing a last 16 spot in the Europa League but they were knocked out of the French Cup by fifth-tier Bourgoin-Jallieu earlier this month.
Sage's replacement at the helm of the seven-time Ligue 1 champions could be Portuguese boss Paulo Fonseca.
The 54-year-old Fonseca has been out of work since leaving AC Milan in December and has reportedly been in contact with Lyon's American owner John Textor.
Lyon's next game is at home to Bulgarians Ludogorets in the Europa League on Thursday before they travel to Ligue top-four rivals in Marseille on Sunday.