They report that Lillo is close to accepting a proposal from Qatari outfit Al-Sadd which would see him leave his position as Guardiola’s right-hand man at Manchester City.
Al-Sadd are the club Xavi Hernandez coached before joining Barcelona last November.
Lillo, 56, is from the Basque Country.
He has enjoyed a long and well-travelled coaching career that has seen him take charge of Amaroz KE, Tolosa, Mirandes, Cultural Leonesa, Salamanca, Oviedo, Tenerife, Zaragoza, Ciudad Murcia, Terrassa, Dorados Sinaloa, Real Sociedad, Almeria, Millonarios, Atletico Nacional, Vissel Kobe and Qingdao Huanghai.
He has also held assistant roles with Chile and Sevilla as well as City.
Guardiola led City to a fourth Premier League title in five seasons last year but their campaign was blemished by failure in the Champions League.
Real Madrid knocked them out in the semi-final.