Talks with a potential candidate are ongoing and promising, two of the people said, adding no agreement had been reached yet and that negotiations could still collapse. No further details about the candidate were disclosed.

One source said it was unlikely to be Siegfried Russwurm, who has been named as a candidate in the past by people close to the situation.

The five-member nomination committee is in charge of proposing a successor to Ulrich Lehner, who resigned last month, citing insufficient backing from the supervisory board. His resignation came shortly after that of Thyssenkrupp Chief Executive Heinrich Hiesinger.

The group's supervisory board could meet as early as next week to vote on a candidate, two of the sources said, adding no extraordinary session has been scheduled so far.

The committee will have its next regular meeting in about two weeks, one of the sources said.

Any candidate needs to be approved by Thyssenkrupp's supervisory board, where half of the 20 seats are held by labour representatives, while the group's two largest shareholders - the Alfried Krupp von Bohlen and Halbach Foundation and activist fund Cevian - jointly hold three seats.

Thyssenkrupp declined to comment.

Investor sources earlier this week urged Thyssenkrupp to find a new chairman by no later than September, concerned that a lengthy search might further delay restructuring efforts at the German conglomerate.

Hiesinger and Lehner both left the group amid mounting pressure to further restructure the elevators-to-submarines group following a deal to move its European steel operations into a joint venture with Tata Steel.

The new chairperson will be in charge of finding a permanent successor to Hiesinger to replace Guido Kerkhoff, Thyssenkrupp's finance chief who has taken over CEO duties for the time being.

(Editing by Tom Sims and Maria Sheahan)

By Christoph Steitz and Matthias Inverardi