The 62-year-old is set to travel to Iran and sign a contract until the end of the 2012/13 season.
The former Turkey boss had already helmed Iranian club Pas Tehran from 2004 to 2006 before coaching Persepolis for one year, however, being released in 2007 after disappointing results in league and Cup.
Denizli coached Besiktas Istanbul from 2008 to 2010, clinching a league championship, but also Persepolis managed to win one league title under Afshin Ghotbi (2007/08) and winning to consecutive editions of Hazfi Cup under Ali Daei (2009/10, 2010/11) in the meantime.
However, Daei's successor Hamid Estili failed to live up to the expectations this season, with Persepolis standing in ninth position of the IPL table and already being eliminated from Hazfi Cup.
Nevertheless, they will compete in the 2012 Asian Champions League due to the 2011 Cup triumph.
The competition will start in March 2012 and Persepolis have been grouped with Al Gharafa (QAT), Al Hilal (KSA) and the winner of the playoff between Al Shabab (UAE) and Neftchi (UZB).