The Senegalese international will leave Wigan this summer on a free transfer and Anfield was expected to be his destination after he held talks with Dalglish over a dream move to Anfield.
But the transfer collapsed after the 61-year-old Kop legend was sacked and Black Cats boss Martin O’Neill is now primed to step in and bring the 24-year-old to the North East.
O’Neill has been impressed by Diame’s dominant displays at the DW Stadium this season and believes he can add some much needed muscle to his midfield as well as an alternative to volatile captain Lee Cattermole.
The Latics enforcer is eager to remain in the Premier League and would reportedly jump at the chance move to the Stadium of Light despite Spanish side Real Betis stating their interest in his services.
He is expected to hold talks with the Northern Irishman on Wearside in the next 48 hours and could be a Sunderland player by the end of the week should negotiations run smoothly.
QPR are also said to be chasing Diame after captain Joey Barton was banned for 12-games after his rampage on the final day at Manchester City.
Wolves striker Steven Fletcher is also on O’Neill’s radar as he seeks a bolster his attacking options with natural goalscorer who can provide the cutting edge they’ve sorely lacked since Darren Bent’s departure 18-months ago,
Fletcher is reportedly desperate to move closer to his native Scotland and discussions between the two parties already underway with a view to a £10 million deal.
The 25-year-old struck 12 goals in the previous campaign for relegated Wanderers and has scored consistently over the last three years for the Midlands outfit.