Oldham have called a press conference for 1500 on Wednesday.
The Latics owners have acted swiftly in their search for a new manager after caretaker boss Joe Royle decided, or was told, not to continue beyond the end of the season.
They were looking for a manager with a proven record in the lower divisions, and they do not come better qualified than Darlington boss Penney.
Penney, who is expected to bring No 2 Martin Gray and goalkeeping coach Andy Collett to work alongside him, took over as manager of Doncaster in 2001/02 with the club at a low ebb after losing their Football League status four years earlier.
He achieved back-to-back promotions, lifting Doncaster from the Conference to League One in the space of two memorable seasons.
Doncaster established themselves in the third tier of English football and they also enjoyed cup success, reaching the quarter-finals of the Carling Cup when they lost in a penalty shootout to Arsenal. They also savoured cup victories against Premier League sides Manchester City and Aston Villa.
Penney left Doncaster early in the 2006/07 season having felt he had taken them as far as he could.
He was soon back in business at Darlington. He took the Quakers into the play-offs last season and they would have probably repeated the feat in the current campaign but for losing 10 points after having to go into administration.
Due to Darlington's ongoing financial problems, Penney is free to walk away from his post and Athletic will not have to pay any compensation. There is also the prospect of Penney being able to bring with him a number of Darlington's top players who will be able to move as free agents.
Penney did not feature in the initial list of 38 potential candidates which were listed by bookmakers Victor Chandler. But by yesterday the his name had suddenly appeared at the top of the list at the incredibly short odds of 11/10.
It is understood that Rotherham manager Mark Robins, who was third favourite, was also in the frame with his work at the cash-strapped Yorkshire club impressing Oldham officials.
Stockport manager Jim Gannon was initially named as favourite for the job having previously been linked with the Latics.