33-year-old Toivonen has enjoyed two seasons with Melbourne Victory in the A-League, scoring 28 goals.
However, it has been clear for a while that he will be leaving Australia, opening the door to an Allsvenskan return.
And all signs point to Toivonen joining Malmo, the club he represented between 2007 and 2009.
Toivonen and Malmo sporting director Daniel Andersson have been in talks and there is an agreement in principle.
The Coronavirus crisis has complicated some things and Andersson is awaiting approval from the Malmo board before everything is official.
Toivonen will take the number ten at Malmo and link up with another returnee, Isaac Kiese Thelin. Kiese Thelin, 27, returned to the Eleda Stadion from Anderlecht on loan in January.
Besides Malmo and Melbourne, Toivonen has played for PSV Eindhoven, Rennes, Sunderland and Toulouse during his career. He also won 64 caps for Sweden, scoring 14 times before retiring from international football in August 2018.