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With Sports Minister Sarbananda Sonowal agreeing in principle to Terry Walsh's demands, the ball is now in the Australian's court to take a call on whether to continue as India's chief hockey coach.
The Sports Authority of India expects him to make up his mind in the next 4-5 days.
In a major setback for Indian hockey, Walsh, the men's national team chief coach, flew back to Australia on Tuesday after his contractual talks with Hockey India and his employer, Sports Authority of India, broke down.
He, however, insisted that he could rejoin the team before the Champions Trophy, which will be staged in Bhubaneshwar, from December 6 to 14, and is waiting awaiting a fresh proposal over the next two days.
But SAI Executive Director (Teams) Sudhir Setia ruled out sending a fresh proposal, saying they are waiting to hear from the Australian.
"He met the sports minister yesterday and the minister has agreed to all his demands in principle. But he said he wants to go home for a few days. He said he needs a break," Setia said.
"We are not going to send any fresh proposal to him. Everything has been discussed in detail. Now he will have to get back to us.
"He said he will have a re-look at the proposal once he returns to Australia and get back to us with 4-5 days. The ball is in his court now. It is now up to him whether he wants to continue or not," said Setia, mincing no words.
Walsh, who replaced fellow-Australian Michael Nobbs as chief coach last October, had resigned last month, demanding more autonomy and decision-making powers.
His month-long notice period ended on Wednesday, but he left for Perth without signing a fresh contract after talks between him, SAI and Hockey India broke down.
Even though Walsh's demands have been agreed in principle, his return may not materialise as Hockey India is not too keen on to have him back in the fold.
Differences between Walsh and Hockey India crept up after the association's president, Narinder Batra, brought up allegations of financial irregularities against the Australian during his stint with USA Field Hockey.
Walsh, however, completely denied these allegations, terming them baseless.
But an official who was present during the talks confirmed that Walsh's differences with Hockey India is the bone of contention.
"His demands were not such an issue. He was even ready to compromise on some of his demands. But it is the internal difference between Walsh and Hockey India which really is the main reason for the deadlock," the official said.
Under Walsh, Indian hockey has made considerable progress over the last year, having qualified for the 2016 Rio Olympics after winning the gold in the Incheon Asian Games and scored a rare Test series victory over Australia.