According to The Sun, Rooney will be offered £1.5million a year by the English Championship side.
His wage will be close to £29,000-a-week, which is more than three times Eustace’s £9,000-a-week wages.
Eustace has been sacked despite the Blues currently sitting sixth in the table.
It is understood that Rooney has been offered the job to create a new identity for the team, which will go about their business with a “clear no fear playing style that all Birmingham City teams will adopt and embrace.”
Rooney has already terminated his contract with D.C. United and is keen to return to England.