The club's directors are understood to have made Zola, 42, their top choice at a meeting on Monday, narrowly ahead of fellow Italian Roberto Donadoni.
Zola, who is Italy's Under-21 coach, has had two interviews for the managerial vacancy at West Ham United but Mike Ashley, Newcastle's owner, hopes he will come north instead.
Bilic, a former Hammers defender, was seen as the leading candidate to take over at Upton Park following Alan Curbishley's resignation last week, but he appears committed to the task of leading his country to the 2010 World Cup finals.
"I'm not going anywhere," Bilic told The Sun newspaper. "Any club from England is a great opportunity. Not for money, honestly, for me it's about ambition. It's about working in England, a country you know I adore. But it's like, no. West Ham is my club, I have feelings for them but I won't go."
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