The Bafana Bafana defender has been on loan at Reading from Tottenham Hotspur since the start of the season, but Brian McDermott has made it clear Khumalo is not part of his plans; he has not played since August.
The Reading Chronicle reports that Osborne is to come in from Brentford as cover in defence, as Sean Morrison has returned to Huddersfield on loan, while "Bongani Khumalo is poised to return to Spurs following an unsuccessful loan".
Brentford boss Uwe Rosler told the Chronicle: "There is strong interest [in Osborne] from Reading, but as far as I am aware they are the only one. We will wait and see whether we do a deal or not, but it has to be to the benefit of this football club."
And McDermott added: "Morrison has gone on loan to Huddersfield so there's a possibility we might bring Karleigh Osborne to cover.
"It's a not a loan, we would just take him. Bongani will go back to Spurs and we have to cover the Sean Morrison situation until the end of the season."
This despite a Spurs spokesman telling KickOff.com two weeks ago: "Bongani is signed on a season-long loan at Reading so will not be going elsewhere or returning here until the end of the season in line with the loan agreement."
After a run of seven wins in nine League matches, The Royals are fifth on the Championship table, in sight of an automatic promotion place.
The club was strapped for cash earlier in the transfer window, but new owners Thames Sports Investment have agreed to consider McDermott's transfer targets as part of their buyout of the club.
Reading are linked to a number of strikers, including Manchester United's Michael Owen, and are also clearing out players deemed surplus to requirements.
With regular centre-backs Younes Kaboul, Michael Dawson, Ledley King, and even William Gallas and Sebastien Bassong, above Khumalo in the Spurs pecking order, a move back to White Hart Lane would spell disaster for the 25-year-old Bafana Bafana man, who is desperately in need of game-time.