The 22-year-old has agreed personal terms on a transfer from West Ham which could eventually see the Baggies pay out a club record £18million fee.
Diangana, who played a major role in helping Albion win promotion while on loan last season, will sign a deal worth around £45,000-a-week.
The Baggies will pay West Ham an initial fee of £12m but add-ons could send the final fee past the £17m they paid Tottenham for Nacer Chadli.
Diangana's arrival will begin a busy period of business for Albion in what until now has been a quiet transfer window.
Boss Slaven Bilic is hoping for two further additions in the coming days as deals edge nearer for Wigan defender Cedric Kipre and Brighton goalkeeper David Button.
It is understood the Baggies are hopeful of clinching the Kipre deal from cash-strapped Wigan, with reports suggesting the deal could be finalised in the coming days. It is believed Blackburn previously agreed a £900,000 fee, but the 23-year-old favours a Premier League move.
In addition, a deal believed to be in the region of £1m is in the works for Button, with Albion believing it has a strong chance of going through.
The 31-year-old would provide much-needed competition for current first choice Sam Johnstone, while bringing valuable top-flight experience to a newly-promoted side.