Manchester council has approached EP to fund and co-develop the replacement of the stadium with what is expected to be a largely residential scheme.
Manchester City played their final game at the ageing stadium in May and are moving eastwards to the Commonwealth Games venue, which was completed last year.
Barbara McLoughlin, who will lead the redevelopment on behalf of the council, said: "EP has said that it will fund the demolition in principle."
But EP said it was still weighing up the terms of a partnership with the council.
A spokesperson said: "We have been approached by Manchester council and are going through an appraisal process. It still has to go to the EP board for approval."
The appraisal includes looking at ideas for the redevelopment and assessing the level of funding it should commit. Any redevelopment is expected to take four years, with the stadium's demolition scheduled to start in September.
EP is appraising the ideas for the redevelopment and the funding it should commit
EP might also fund a project in the East Manchester development area through the English Cities Fund, which is a partnership between the quango, contractor Amec and insurer Legal & General.
The project will be a phase of the £200m New Islington regeneration scheme, overseen by urban regeneration company New East Manchester.
It will involve the refurbishment or demolition of up to 300 houses in the Openshaw estate.
New East Manchester chief executive Tom Russell said that he hoped a deal would be reached later in the summer, but added that negotiations on the scope of the project were going on. Russell said: "It's a big area. We're discussing how to define the barriers within Openshaw."