Local media have said he is expected to announce his exit once qualification has been secured, and then step down after next year's finals in Brazil.
The Gazzetta Dello Sport have reported that Japan manager Alberto Zaccheroni is favourite to take charge, with Juventus manager Antonio Conte, Milan boss Massimiliano Allegri and former Manchester City manager Roberto Mancini also in the frame.
Italy, who have 14 points from six games and are four ahead of second-placed Bulgaria, are missing five first-choice players, including Milan pair Mario Balotelli and Riccardo Montolivo and Southampton striker Pablo Osvaldo.
The suspended trio will be available for Tuesday's clash with third-placed Czech Republic, in which Italy could secure qualification if they win on Friday.
Juventus defender Andrea Barzagli had to leave Italy's training camp at Coverciano with an Achilles tendon problem while team mate Claudio Marchisio has been ruled out with an injury to his left knee.
Despite being relatively threadbare up front, Prandelli did not pick Giuseppe Rossi even though the Fiorentina striker has started the season in great form with three goals in two games after coming back from two successive knee injuries.
"I'm following him with great interest. He's now finding his best condition again," Prandelli said on Monday. "But we mustn't push things by calling him up for the national team at this point."
Given their lack of options in attack on Tuesday Prandelli revealed that his game plan would be to pack the midfield and make use of pace down the flanks.
This week Prandelli lamented the lack of convincing young talent coming through the ranks, but he could offer Napoli's home-grown rising star Lorenzo Insigne a starting place alongside Lazio's Antonio Candreva in support of lone striker Alberto Gilardino, a role he would take from Sunderland midfielder Emanuele Giaccherini.
Bulgaria coach Penev is not entirely happy with the form of PSV Eindhoven midfielder Stanislav Manolev, who is their top scorer in the qualifying campaign with three goals including a stunning strike in the 2-2 draw with Italy last September, as he lacks match practice.
Local media expect that Manolev, who has yet to play for his club this season, could be dropped from the starting line-up with youngster Todor Nedelev ready to deputise.
Bulgaria will definitely miss another regular starter, CSKA Moscow midfielder Georgi Milanov, as he is suspended after receiving his second yellow card in the 1-1 draw at Denmark in March. Experienced Georgi Iliev is expected to step in.
Coach Penev will also have to solve a goalkeeping dilemma as first choice Nikolay Mihaylov has failed to break through at his new club Hellas Verona and Ludogorets's Vladislav Stoyanov could get a chance to play.
Penev is confident his team is good enough to collect points in Italy, although Bulgaria's record is not a proud one with six defeats and only two draws dating back to 1966.
The former Valencia and Atletico Madrid striker needs to find some spark and a sharper cutting edge from his team after a below-par showing against Macedonia in an international friendly in Skopje last month.
Italy: Gianluigi Buffon; Ignazio Abate, Leonardo Bonucci, Giorgio Chiellini, Luca Antonelli; Daniele De Rossi, Andrea Pirlo, Thiago Motta; Antonio Candreva, Emanuele Giaccherini; Alberto Gilardino
Bulgaria: Nikolay Mihaylov; Yordan Minev, Ivan Ivanov, Nikolay Bodurov, Veselin Minev; Svetoslav Dyakov, Vladimir Gadzhev, Georgi Iliev; Todor Nedelev, Ivelin Popov; Aleksandar Tonevv
- Sports & Recreation
- Antonio Conte
- Massimiliano Allegri
- Antonio Candreva