Speaking to the East Anglian Daily Times, the former Birmingham and Wigan manager said: "Talks are ongoing as I understand it and we will just have to wait and see if these talks come to anything."
Earlier in the summer Town made a move for the 26 year old Irishman, along with team-mate Dean Whitehead, a move which never happened, and it was assumed that the Waterford born player would join Hull, who were also interested in securing his services.
However the move to Hull for the Republic of Ireland Under 21 international fell through, and with Murphy out of favour at the Stadium of Light, it has been reported by a national newspaper that further talks with Town have taken place which will lead to Murphy heading to Portman Road.
Murphy whoo spent time on loan at Sheffield Wednesday in the 2005/2006 season, has not scored in his last 37 games for Sunderland, with just three in the last 57 games he has taken part in. The last Time the player found the target was against Wigan in the Premier League on 9th February 2008.
Town Boss Roy Keane has made no secret of the fact he would like to add extra firepower to his squad and whilst Tamas Priskin has been brought in, Billy Clarke, Jordan Rhodes, Danny Haynes and Dean Bowditch have left the club with Kevin Lisbie out on loan and Pablo Counago injured.
Click here for a player profile with career starts on Daryl Murphy.