According to Sky sources, Palace have agreed a fee with West Ham for Sakho understood to be between £10m and £12m.
West Ham want to strengthen their midfield options, and are targeting a number of players, and Sakho has been deemed surplus to requirements given the squad is top heavy with strikers and forwards.
With the deals likely to be confirmed in the coming days, the future of current Palace striker Christian Benteke is increasingly uncertain.
Roy Hodgson is keeping "quiet" Crystal Palace's linked move for Diafra Sakho but says the club are "working overtime" on signings. The 28-year-old has scored four goals in 17 appearances, starting just two of them, this season.
Cardiff City, Swansea, Newcastle United and Everton had all shown interest in the Senegal international who has scored six goals this season for club and country.
Asked about the club's pursuit of Sakho, Hodgson said: "I'm not prepared to talk about any players".
"It would be very foolish of me to start commenting on anybody at the moment".
However, Sam Allardyce is ready to part ways with the striker after Everton completed the £27 million deal for Turkish striker Cenk Tosun.
"We have always been thinking that when the January transfer window comes around that we will try and resolve some of these problems".
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