Reports suggest O'Neill is hoping to retain the management team he has worked with for the last four years with the Republic of Ireland, meaning that assistant manager Roy Keane could also be heading to the Bet 365 Stadium.
"It's like being engaged - you shouldn't be going out with other people".
O'Neill was an early favourite to succeed Mark Hughes at Stoke City but Espanyol boss Quique Sanchez Flores is thought to be on the verge of accepting that job.
That is despite the fact he is still operating as Ireland manager.
On January 12, O'Neill will return to Dublin, having still not signed that contract, after meeting with Stoke City officials this week regarding their vacant manager's position.
The 65-year-old was free to hold talks with the Premier League side as he has not yet signed a new contract with the FAI, despite a verbal agreement to commit to the Ireland job for another two years.
Should Keane not leave then Steve Walford, Steve Guppy and Seamus McDonagh are in contention for roles.
It means O'Neill doesn't need permission to talk to interested parties, nor would the FAI be entitled to any compensation.
He told RTE Radio 1: "It's embarrassing for the FAI".
Those comments were aired in the immediate aftermath of Ireland's hammering at the hands of Denmark in the November World Cup play-off.
Despite O'Neill taking time off for a holiday to reflect, fears of him walking away were allayed by his visit to the FAI headquarters before Christmas to plan for 2018 and attend the association's Christmas party.
Still, the contract remained unsigned and there was a degree of pantomime to the recent assertion by FAI treasurer Eddie Murray that they expected O'Neill to rubberstamp the deal.