Daryl Gibson is expected to be appointed Waratahs head coach in coming days after rival Nick Scrivener withdrew from the race to take up an offer in Japan.
Gibson is now duelling with Australian under-20s coach Adrian Thompson to replace head coach Michael Cheika, who will concentrate solely on the Wallabies when the current Super Rugby season ends.
It is understood Thompson has impressed the Waratahs' selection panel, who could look at involving him in their program in some capacity.
But with two successful seasons at the Waratahs, Gibson looks assured of taking over as head coach, with Nathan Grey as an assistant (defence). The Waratahs will also be looking for a forwards coach.
Scrivener, the former Wallabies defence coach under Ewen McKenzie and Robbie Deans, notified the Waratahs on Tuesday that he would be taking up a deal with an unnamed Japanese club in the Top League.
Scott Wisemantel, the fourth candidate on the shortlist, will head to Lyon in France where he will take over from another Australian, Tim Lane.
Thompson, in his third year as the national under-20s coach, coached with Grey in Japan at Kyuden Voltex. The Brisbane-raised coach spent six seasons at the club in Fukuoka, during which time the team made it into the Top League, before joining the Australian Rugby Union.
Last year he took a squad including Wallabies debutant Sean McMahon, Rebels centre Lalakai Foketi and Waratahs back Andrew Kellaway to the IRB Junior World Championships. The team finished fifth behind winners England, South Africa, New Zealand and Ireland.
The Waratahs host the Blues at Allianz Stadium this Saturday and are looking to capitalise on a resounding win against Australian conference leaders the Brumbies last week.
The Blues have not won a game in six rounds this season but Cheika said they remained a dangerous proposition.
"If you've seen all their games they're only a fraction away, even the trips overseas they were very close to winning games," he said.
"They were close to beating the [Hurricanes] who are undefeated. As a coach I look at that and know that if that was my team and if one person doesn't take me the right way I'm going to make sure I pounce.
"I know for a fact that they fancy themselves against Australian teams, they think they can push us around a little bit, get physical with us, so we're going to have to really be consistent in all the physical areas of the game and have a little bit extra in defence as well, because they have some awesome attacking players, and deliver good skills in attack."
The Waratahs trained in the rain at Newington College on Tuesday.
Test hooker Tatafu Polota-Nau appears to have recovered from a head knock that kept him out of the side's 28-13 victory last week but will need to train fully on Thursday to be selected. Cheika was pleased with Tolu Latu's starting debut in the No.2 jersey last week and will have no issue using him again there if necessary.
Adam Ashley-Cooper will be given this week and next week's bye round to complete his recovery from a knee injury.
The Blues trained in front of All Blacks team management in Auckland on Tuesday and spent most of the session on contact work.
"We're under no illusions as to how they're going to play," captain Jerome Kaino said. "They're going to be physical, they've got some big boys, and we've got to prepare for that."
Assistant coach Glenn Moore, a new addition to John Kirwan's coaching team, said the Waratahs' dismantling of the Brumbies made it crystal-clear what was in store.
"They bashed them up. We've got to make sure we're the ones setting the standard there," he said. "We've been under the pump, but that criticism comes with the territory. We're travelling to play the champions and we're excited about it."