Raith Rovers have agreed a financial settlement with Dundee United to let the relegated Tannadice side hold talks with manager Ray McKinnon.
It comes after talks between McKinnon and some of the Kirkcaldy club’s board.
“We are doing all we feasibly can to retain the services of our manager,” said Raith Rovers chief executive Eric Drysdale.
“However, we understand that Ray wants to listen to what Dundee United have to say and we have agreed to allow this.”
The club say they have reached an agreement for compensation with United should McKinnon, who had two spells with at Tannadice as a player, decide to accept their offer.
Raith Rovers held meetings with the 45-year-old on Thursday, after the match with Hibernian at Easter Road on Saturday, and again on Sunday afternoon.
They had rejected United’s approach for McKinnon to succeed Mixu Paatelainen, who was sacked last week following their relegation from the Scottish Premiership.
McKinnon took over at Starks Park in May 2015, having previously managed Brechin City, and guided Raith to the play-offs for the top flight, where they lost 2-1 on aggregate to Hibs on Saturday.