Donnelly is off contract following a three-year stint as head coach.
He has accepted a role as assistant coach with the Highlanders for the next two Super Rugby campaigns, but has also indicated he is keen to return for Otago next season.
The 41-year-old former All Blacks lock led the New Zealand under-20 side through an unbeaten Oceania Championship tournament this year and is very much seen as a coach on the rise.
However, the Otago season did not go as well as hoped. The team boasted 23 players with Super Rugby experience but did not make the playoffs, which most fans would interpret as a failure.
Otago Rugby Football Union chief executive Richard Kinley said the union was still completing a review of the season and had not made a decision on whether Donnelly would be reappointed or the position would be advertised.
Kinley will meet a sub committee of the board "in a week or two" where he will present a final summary of the NPC and FPC season.
Following that there is a board meeting at the end of the month where "there will be some recommendations and decisions made".
Asked if he would recommend Donnelly for the position, he responded saying "we are still working through the final stages of our review process across both our FPC and NPC programmes, therefore it would be premature for me to make any recommendations to the ORFU Board until this is completed".
That was artfully noncommittal, but other responses suggest Donnelly is a strong favourite.
Kinley said initial findings were positive.
He described it as "the most positive surveys ... around culture, environment and opportunity that I’ve seen from the players in a long time".
Kinley was also thrilled with the number of young players who were getting opportunities and impressing.
"What that says to me is the support structures and programmes we have in place helped those players to maximise their opportunities."
"What I thought was really cool ... was seeing the likes of Henry Bell, Cam Millar, Oli Haig, and even Jack Leslie get his crack in Wellington.
"That was the most number of young players coming through in a season for me and the same happened in the Spirit team. For me that has been a positive."
As for the results, Kinley pointed to several close losses and the tight nature of the competition.
"To lose one game by one point and three by six points shows we were there or thereabouts.
"Next year hopefully we can go another step.
"I think we are looking to retain a number of the players and we’ve got other young players coming through, so I do think the future looks pretty good regardless of who is coaching and leading them."
Kinley will attend a New Zealand Rugby meeting in Auckland during the next two days to discuss issues around the game and how to future-proof the sport.
Kinley said the future of the NPC was not on the agenda specifically, but he felt the first year of the new format had some positive aspects and he would like to see the status quo remain.
He liked the idea of one division rather the Premiership-Championship split.
