The 22-year-old has struggled for game-time this season, starting just one match in all competitions for the Bhoys.
He has been linked with a move to Aberdeen this month, but the latest report claims that Morgan is close to joining the Black Cats.
The Dons were in pole position to sign him, but the player reportedly prefers to reunite with his former boss Jack Ross.
The Sunderland Echo adds that Morgan will move to Sunderland provided the clubs can agree on terms.
Ross is keen on bringing his former player to the Stadium of Light, having worked with him at St. Mirren.
Morgan scored 18 goals and provided 13 assists in all competitions during the 2017/18 campaign under Ross at Mirren. He would be a superb signing for the Black Cats.
According to latest report from Sky Sports, the Black Cats are close to finalising the loan move for Morgan. The midfielder is due on Wearside for a medical after choosing them over Aberdeen.