According to an Iraqi reporter, the normalization committee for the Iraq Football Association (IFA) has negotiated with the German coach.
Schafer led Esteghlal from 2017 to 2019.
Carlos Queiroz, who led Iran from 2011 to 2019, is also a candidate to lead Iraq.
Iraq is in Group A along with Iran, Korea Republic, United Arab Emirates, Syria and Lebanon in Round 3 of the 2022 FIFA World Cup.
The competition will begin on September 1.