According to several newspaper reports the Ospreys have agreed to a request for Phillips to be released from his £1 million plus contract.
The 2009 Lions scrum-half has three years remaining on his current deal but has chosen to pursue a career elsewhere to put Europe's big-spenders on red alert.
Fellow 2009 tourists James Hook and Lee Byrne have agreed bumper deals to join Perpignan and Clermont Auvergne in the Top 14 respectively at the end of the season, while Gavin Henson made a dream debut for Toulon on the weekend following a stint at Saracens.
Lions great Terry Holmes, a tourist in 1979 and 1983, insists there will be no shortage of offers for the man that last pulled on the famous number nine jersey.
"I'm sure there will be clubs out there interested in securing his services." said Holmes. "You might find one or two willing to come up with that kind of money and take a punt on him.
"It will probably have to be France or England for Mike, because I'm not sure if the other Welsh teams could afford him. But beyond Wales, I think he'll find someone."
Phillips has fallen out of favour at the Liberty Stadium since the RBS 6 Nations with rookie Rhys Webb handed the number nine shirt in recent games against Edinburgh and Cardiff Blues.
The Grand Slam winners' future at the Swansea-based region was thrown into further doubt after the Ospreys announced the signing of Kahn Fotuali'i from Canterbury Crusaders two weeks ago and handed Tom Isaacs a new two-year contract.
But Holmes has dismissed the criticism and maintains Phillips can thrive for Wales at the World Cup,
"He is still a world-class player," said Holmes.
"Eighteen months ago, people were rating him the best No. 9 in the game. He has since suffered a couple of serious injuries and hasn't been at his best, but form is temporary, class is permanent.
"Every player hits difficulties with form at some point. But playing for Wales, Mike did get better as the campaign progressed.
"If he can build on that he can still do well for Wales at the World Cup. He has his critics but he is someone I have time for as a player."