The 27-year-old midfielder will be out of contract at the end of the season and he will not be signing a new deal with Borussia Dortmund.
Dahoud is wanted at several Premier League clubs and at least three teams are claimed to be interested in him.
According to German daily WAZ, Newcastle, Leicester and Brighton are in the race to sign the midfielder in the transfer window.
But it is claimed that Brighton are the team who are leading the race to sign him.
Dahoud is not keen on a move to Leicester, who are struggling to save themselves from getting relegated this season.
He is on Newcastle’s shortlist but they have other priority options over the 27-year-old midfielder.
Brighton seem to be his most likely destination and there are suggestions he has already undergone a medical at his new club.