Baxter was previously in charge of the national team from May 2004 to November 2005, when he was sacked after failing to qualify for the 2006 World Cup.
SAFA are searching for a new permanent manager after Shakes Mashaba was relieved of his duties in November last year, with Owen da Gama having since been appointed on an interim basis.
Baxter's agent, Steve Kapulschnik, confirmed on Wednesday they had been in contact with SAFA regarding the Bafana job, while Matsatsantsa issued a statement to announce they had given the Englishman the green light to open negotiations.
