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The 48-year-old is keen to strengthen the Reading back line having seen his team leak four goals in his first three games in charge. Iceland international Ingimarsson is his number one transfer target.
The Royals have agreed a £100,000 fee with Premiership strugglers Wolverhampton Wanderers for the former Torquay man's services but must now agree personal terms with the defender-come-midfielder before Palace have a chance to.
The proposed transfer deal is expected to include various sell on clauses and further payments depending on appearances. It had earlier been anticipated that the signing of Ingimarsson, 26, would be on a loan basis only.
The Eagles, who are also making heavy going of their Division One schedule, are attempting to hijack the transfer at the eleventh hour.
Wolves chief executive Jez Moxey this morning confirmed that the Royals were favourites to land the 26-year-old who hasn't made a first team appearance for the Midlands side this season.
"We have agreed a deal with Reading and Ivar is currently involved in discussions with them regarding personal terms," revealed the Molineux chief.
"If he is happy with the remuneration then I see no reason why the transfer can't be concluded. But, at the moment, we await the outcome of those talks. Crystal Palace have also made us an offer but this has not yet been finalised. Ivar and his agent are aware of their interest."
Ingimarsson, who is out of contract at the end of the season, has forged a good relationship with Coppell following previous spells under the Reading man's command. The Iceland international has linked up with our Steve at Brentford, and then Brighton last season.