An official announcement is expected imminently to confirm the appointment.
It's thought that Rodgers will bring his backroom staff from Watford as well.
Rodgers took over at Vicarage Rd after the sacking of Aidy Boothroyd. He rescued their season and led them into mid table.
The backroom staff include Frank Lampard Senior, Dean Austin and football physiologist Karl Halabi, who was on Reading's books as a youngster.
Rodgers has a long association with Reading being the reserve and academy manager for over a decade before leaving to work with Jose Mourinho at Chelsea.
Official confirmation to follow.