The 36-year-old will join the team once visa formalities are finalised, ESPN and The Athletic reported.
A reporter for The Athletic tweeted a photo of Rooney at Dulles International Airport outside Washington on Sunday.
The Englishman will replace Argentine Hernan Losada, who was fired due to poor results only six games into the season.
The team also failed to rebound after Losada’s departure and currently occupies the penultimate position in the Eastern Conference with just 17 points in 17 games.
Led by interim coach Chad Ashton, the capital club suffered a crushing 7-0 drubbing at the hands of the Philadelphia Union on Friday.
Rooney resigned as manager of Derby County at the end of June, gaining plaudits for his efforts in his first managerial role under very trying cirumstances.
Rooney was unable to keep them in the Championship after the crisis-torn club were hit by a 21-point deduction as punishment for financial issues.
However, he had managed to keep their hopes alive of miraculously escaping the drop into the final weeks of the season.
In his spell at DC United as a player he scored 23 goals in 48 games in the 2018 and 2019 seasons.