Chelsea have earmarked the 33-year-old as their number one choice to replace Carlo Ancelotti but Porto insisted on Monday that no club had met the 15million euro release clause in his contract.
The Lusa news agency reported on Tuesday morning, however, that Villas-Boas had terminated his deal at the Estadio do Dragao by paying the release clause himself.
Villas-Boas guided the Dragons to the domestic double and Europa League success last season.
And he is no stranger to Chelsea, having worked there under Jose Mourinho.
Villas-Boas, who was reportedly also on Inter Milan's wanted list, would dramatically increase his salary with a move back to Chelsea, with reports suggesting as much as ?4.4million-a-year is on offer.
If Villas-Boas does succeed Ancelotti one of his first signings could be to bring Porto's star striker Falcao to Stamford Bridge along with him, the ?25m-rated Colombian having impressed as the Dragons won the Europa League final at Dublin's Aviva Stadium, where the 25-year-old netted the only goal against Braga.
Source: Team Talk
Source: Team Talk