The 21-year-old winger could reportedly have the chance to join the MLS Cup holders permanently.
According to the Oregonian, the former England Under-20 international is set to join reigning MLS Cup champions Portland Timbers on a season-long loan, with the deal expected to be with a view to a permanent move.
The 21-year-old's Leicester contract is set to expire in the summer, however, so he could potentially join Caleb Porter's side on a free transfer if he impresses during his first few months in Oregon and his Foxes deal is not renewed.
Barmby, who can also play at full-back or up top, began his youth career with Hull City before moving to Manchester United in 2008 on the advice of his father, former England and Liverpool midfielder Nick.
The versatile youngster was a highly-rated prospect at Old Trafford but ultimately decided to leave the club on a free transfer in the summer of 2014 to join then-Premier League newcomers Leicester because of better first-team prospects.
However, the Harlow-born attacker has so far failed to make an appearance for the top-flight leaders and recently spent two months on loan at League Two side Notts County after previously being shipped out to Rotherham United last season.
The Timbers, who beat Columbus Crew SC 2-1 to lift their first-ever MLS Cup title in December, have been actively looking to sign a new winger ever since long-time regular Rodney Wallace opted to join Portuguese side FC Arouca after his contract expired at the end of last season.
Designated Player Lucas Melano and 23-year-old Colombian Dairon Asprilla are currently projected to start on the flanks in Caleb Porter’s 4-3-3 formation going into the new campaign, but the club remain desperate to add some depth out wide.
Barmby’s versatility would be an obvious bonus – especially with some questions about who will start at left-back in the wake of Jorge Villafana’s recent move to Santos Laguna – and he could be in line to see some significant minutes if the switch to Providence Park does indeed go through.