The breakthrough in the search for David Moyes' replacement, which has now extended beyond five weeks, came as Sunderland revealed that talks over a potential takeover had broken down with Ellis Short having resolved to remain at the helm.

Short had held talks with several interested parties, including one from Germany and another from the United States, but, having not received an acceptable offer for the club, moved to end the uncertainty with the the new Sky Bet Championship season just six weeks away.

In a statement, the club said: "Recently, we informed supporters that discussions were taking place with parties who had expressed an interest in acquiring ownership of Sunderland AFC. Subsequently, more detailed talks were held over the last week with one of these groups.

"Ellis Short and the board were committed to ascertain if this group was better placed to take the club forward in the right way and to improve it, both on and off the pitch.

"A defined time-frame was placed on discussions to ensure that the club could move forward quickly and decisively with its plans for the new season should they not come to fruition.

"We have concluded these talks and have determined that this proposed sale would not be in the best interests of Sunderland AFC.

"Ellis Short will continue his commitment to the club, both financially and personally, moving forward.

"We would like to thank our supporters for their patience during what we know has been a period of uncertainty and frustration for them.

"Preston North End have granted us permission to speak with Simon Grayson regarding the manager's position."

Grayson, 47, was identified some days ago as Sunderland's preferred candidate after Aberdeen boss Derek McInnes had rejected the opportunity to succeed Moyes amid uncertainty over the club's ownership.

Preston confirmed Sunderland's approach in a statement which said: "Preston North End have today been contacted by Sunderland Football Club to ask permission to speak to Simon Grayson in relation to their vacant managerial position.

"Having spoken to Simon, he has asked permission to speak to the Black Cats and therefore the club had no option but to allow these conversations to take place with a compensation package already guaranteed in his contract.

"Whilst these talks are ongoing, Steve Thompson will be in charge of first-team affairs. The club will make no further comment at this stage."

It proved an eventful day on Wearside as striker Jermain Defoe completed his free transfer to Bournemouth and Fabio Borini underwent a medical at AC Milan.