But deal probably won't be signed until March
It was rumoured Simon Cowell, 49, wanted to replace her with Victoria Beckham, 34, Emma Bunton, 33, Lily Allen, 23, or Charlotte Church, 22.
But Dannii‘s spokesman confirms she’s in discussion with bosses over her new deal.
‘She would very much love to return to The X Factor for Series 6,’ he tells Now Online.
‘Talks have begun, but the contracts are never signed off on until March/April time.
‘Dannii is also busy filming Australia’s Got Talent.’
Dannii, 37, cried on live TV last year when Louis Walsh accused her of stealing a song from his act JLS.