He agreed to replace Roberto Martinez (49) on a contract up to the 2026 World Cup but has been unable to sign while negotiating the balance of his contract at Bundesliga club Leipzig.
Tedesco was fired in September but is still entitled to an estimated one million euro in wages, the sources told Reuters on Tuesday.
He also stands to earn a further bonus payment if the club win the Bundesliga and is negotiating a settlement to see how much he could still recover.
Leipzig are currently fourth in the Bundesliga standings, four points behind leaders Bayern Munich after 19 games.
The Belgian FA had hoped for a formal announcement on the new coach to be made at the end of this week but are still waiting for Tedesco’s talks with Leipzig to be concluded.
They are confident, however, that he will have ample time to prepare for their opening Euro 2024 qualifier against Sweden in Stockholm on March 24, the sources added.
Belgium have a friendly versus Germany in Cologne scheduled for four days later.
Martinez left after Belgium's much vaunted side crashed out in the first round of the World Cup in Qatar in December and has since been named Portugal manager.
Tedesco, who was born in Italy but grew up in Germany, has also coached Schalke and Spartak Moscow.
