West Brom have given Celtic permission to talk to manager Tony Mowbray after agreeing a compensation package with the Parkhead club.

Celtic chief executive Peter Lawwell targeted the Baggies boss, a former Celtic defender, as the replacement for Gordon Strachan who departed three weeks ago.

A possible appointment had been held up by West Brom's insistence that Celtic would have to meet their £2million compensation figure.

The figure has now been agreed in principle, and will rise if Mowbray decides to take West Brom assistant manager Mark Venus and first-team coach Peter Grant, a former Celtic team-mate, with him to Parkhead.

It ends several days of stand-off since West Brom made their demands clear and chairman Jeremy Peace indicated he was not prepared to back down.

But West Brom announced on Saturday that a breakthrough had been made.

Peace told his club website: "We do not want to lose Tony because he has been an integral part of a long-term project at the club which the vast majority of our fans have bought into.

"But Tony expressed his desire to talk to Celtic and, now that the compensation figure in his contract has been met to our satisfaction, that process can take place.

"If Tony decides to join Celtic, he would leave with our good wishes and we would then immediately put into action the task of appointing a new manager who can take the club forward."

John Reid, Celtic's chairman, confirmed that they would now be speaking to Mowbray.

"These are complex but important negotiations and we can assure our supporters that we continue to aim to get the right man for the job in the right way," he told Celtic's website.

Mowbray played for Celtic between 1991 and 1995, straddled by spells with Middlesbrough and Ipswich, with whom he started his coaching career.

He had a brief spell as caretaker after the sacking of present Scotland boss George Burley before becoming a manager in his own right at Hibernian.

Mowbray led the Edinburgh club to two top-four finishes in 2005 and 2006, after which he left for West Brom.

He led the Baggies to the Championship play-offs, losing to Derby, but the following season they won the title and promotion to the Premier League.

However, they only lasted a season in England's top tier and were relegated despite receiving plaudits for their attacking style of football.