Everton are keen to offload the Colombia international and failed to ship him out last month, despite interest from FC Porto.
The possibility of a switch to Qatar has now opened up for James and he has travelled to the Middle East for talks over a move to Al-Rayyan.
According to Argentine journalist Cesar Luis Merlo, a verbal agreement is in place for James to join Al-Rayyan.
It is claimed that the Qatari club will sign James on a loan deal and the total cost to take him to the Middle East will come in at €8m.
The loan agreement will run until June 2022, at which time James’ contract at Everton will run out.
Al-Rayyan are currently coached by former France boss Laurent Blanc and have collected two points from their opening two Qatar Stars League games.
James is out of favour at Everton and the move to Qatar will hand him an opportunity to clock regular first team football, ahead of then deciding whether to stay at Al-Rayyan or switch elsewhere next summer.