It is thought the switch is being given serious consideration by Mike Ashley and other senior figures at the high street giant.
With Debenhams on the way out of Wolverhampton it could be a deal which suits all parties, particularly with the city’s university trying to buy the Beatties building.
It would provide House of Fraser with the opportunity to remain in the city and move to a more prominent location as the Mander Centre’s anchor store.
It would also solve a headache for the shopping centre, which was dealt a blow when the loss of its biggest retailer was announced last year.
Debenhams is still open but remains on course to close in the new year, despite attempts to convince the company to stay put.
The talks have been confirmed by senior sources in the city but it is not clear what stage they are at.
House of Fraser’s position as to whether it sees a future in Wolverhampton has been unclear due to the much-publicised troubles at the retailer.
Tycoon Mr Ashley, whose Sports Direct owns House of Fraser, visited Beatties last week with changes at two of the city's largest retailers on the horizon.
The University of Wolverhampton has lodged a bid of around £3 million to buy the iconic Beatties building which, if accepted, would signal the end of House of Fraser’s tenure.
Sports Direct’s initial one-year lease expired last month, according to documents seen by the Express & Star.
Councillor Wendy Thompson, Conservative leader in the city, believes the move could be the ideal solution to Wolverhampton’s high street crisis.
She said: “The fact that the buildings would be used would be a real benefit. It would be very positive news, if it happens, and is something to be welcomed.
“I hope it does work out because I’m not happy to lose either store but if we have got to lose one let’s at least keep the other.”
Debenhams announced last year that the Wolverhampton store was one of 22 set for the axe, just 18 months after opening as the anchor store in the newly-refurbished Mander Centre.
Debenhams declined to comment.
Neither Benson Elliot, which owns the Mander Centre, or Sports Direct were available for comment.