German side Mainz said Hamza's contract was terminated by mutual consent after he failed to prove his worth following his close-season arrival.
Reports suggested the talented but controversial forward, who never lived up to his potential, might return to his former club Zamalek but the Cairo side did not express an interest in signing him.
Ittihad, who lie second from bottom in the Egyptian Premier League table after making a disastrous start to their season, appear in pole position to snap him up.
"The club's chairman Mohamed Moselhi gave me the green light to negotiate with Hamza," Omar, who resigned as Ittihad boss in 2007, told FilGoal.com.
Ittihad's frontmen failed to impress so far this season. Mohamed Al-Morsi, who joined from Zamalek on a season-long loan, is the only striker to have found the net after eight games.
The Alexandria-based club have recently denied they were interested in Ahli's out-of-favor duo Osama Hosni and Ahmed Belal.