The goalkeeper is ready to leave Selhurst Park this summer, despite only moving there a year ago from Marseille.
The France international has struggled for action in England and he is eyeing a return to Ligue 1 when the transfer window opens.
Marseille are keen on bringing Mandanda back to the Stade Velodrome and, according to L'Equipe, they have now opened formal negotiations with Palace.
The French side are looking to fork over around £2m for the 32-year-old after letting him leave for free last summer when his contract expired.
However, Palace are said to want closer to £4m for Mandanda and, although personal terms have been provisionally agreed, Marseille may have to up their offer if they want to complete a deal.