Final details are still being negotiated between Netflix, Saudi Arabian organisers Sela and the camps representing both fighters. However, Cardiff has emerged as the preferred destination, with an official announcement expected this week.
The development represents a major change of direction for a fight that, only weeks ago, appeared increasingly likely to take place in New York.
Madison Square Garden had been at the centre of plans, with arrangements reportedly advanced enough for a news conference in Manhattan to be considered. Those plans ultimately stalled after Joshua and his promoter, Eddie Hearn, maintained that the fighter's contractual agreement required the bout to take place in the United Kingdom.
That position proved decisive.
Joshua's UK clause reshaped the negotiations
Wembley Stadium had long been viewed as the obvious venue for a fight between two of Britain's most prominent heavyweight boxers of the modern era.
However, negotiations became complicated because Fury and Joshua had separate agreements with Sela rather than a single joint contract.
While Fury's agreement did not contain a geographical restriction, Joshua's deal stipulated that his fight must be staged in the UK.
As discussions progressed, organisers and Netflix reportedly favoured taking the event to the United States, where a major fight could be built around a prime-time television audience.
Hearn acknowledged that New York was preferred by many of the parties involved and that Matchroom had even examined what compensation might be required to remove the British-location provision.
For a period, the disagreement threatened to derail the fight altogether.
Fury publicly criticised Joshua for delaying the contest and briefly suggested that he could instead pursue another bout, including a potential trilogy fight with Oleksandr Usyk.
Once Fury agreed to continue with negotiations, however, organisers were left with the task of finding a British venue capable of accommodating a huge crowd, an international broadcast operation and a US-friendly start time in the middle of winter.
Cardiff quickly became a logical solution.
Principality Stadium's roof offers a major advantage
The venue's most obvious advantage is its retractable roof.
With the fight now being targeted for December, staging the event at an open-air British stadium would introduce considerable uncertainty over weather conditions.
Wembley offers enormous prestige and capacity, but freezing temperatures, rain and strong winds could complicate an event expected to attract tens of thousands of spectators and a worldwide television audience.
An indoor arena such as London's O2 would remove the weather risk but significantly reduce the number of fans who could attend.
Principality Stadium provides a compromise.
Its roof allows organisers to retain the atmosphere, scale and commercial potential of a major stadium event while protecting spectators, fighters and production crews from the winter weather.
The stadium's official seated capacity is just below 74,000, although boxing configurations can allow for larger crowds.
Joshua already has a strong history at the Cardiff venue. He defended his WBA and IBF titles against Carlos Takam there in 2017 before returning five months later to defeat Joseph Parker and add the WBO heavyweight title.
The Takam fight attracted close to 80,000 spectators, demonstrating Joshua's ability to generate enormous support in the Welsh capital.
Cardiff can accommodate a US-friendly broadcast time
Another important consideration is the timing of the fight.
Netflix is understood to be keen to stage the bout at a time that allows viewers in the United States to watch during prime time.
That could mean a ring walk in Britain at around 1am, corresponding to approximately 8pm on the US East Coast.
Such a late start would create difficulties at Wembley, which operates under a 11pm event curfew.
London Mayor Sadiq Khan has previously expressed support for the event, while Wembley officials have been open to discussions. But obtaining the necessary approvals from Brent Council and local safety authorities for a fight finishing in the early hours would add another layer of complexity.
Cardiff presents fewer obstacles in that regard.
The Welsh Rugby Union, which owns and operates Principality Stadium, has previously indicated that it would welcome the fight and that a late finish would not automatically prevent the venue from hosting it.
That is particularly significant given the stadium's history with late-night boxing.
In 2007, Joe Calzaghe's super-middleweight unification victory over Mikkel Kessler began at about 2am local time as organisers sought to accommodate the requirements of American broadcaster Showtime.
A Fury-Joshua event would nevertheless require extensive planning for transport, policing, crowd management and the movement of tens of thousands of spectators through Cardiff in the early hours.
A British blockbuster on British soil
Beyond the practical advantages, Cardiff would also give the fight the setting its scale demands.
Fury and Joshua have been at the centre of British heavyweight boxing for more than a decade, even though both men have now lost their world titles.
Their meeting has repeatedly been discussed, negotiated and postponed, turning the prospect of an all-British clash into one of the sport's longest-running stories.
Taking the contest to the United States would have provided a lucrative international spectacle but would have meant British fans watching their biggest domestic heavyweight fight from afar.
A Cardiff staging would instead put those supporters at the heart of the event.
Both fighters have built large domestic followings, while British fans have repeatedly filled stadiums for their previous fights. A contest between the pair on home soil would therefore have significance beyond the championship implications, potentially becoming one of the biggest boxing events ever staged in Britain.
Cardiff also has a long association with major heavyweight contests.
In 1993, Lennox Lewis defended his WBC heavyweight title against fellow Briton Frank Bruno at Cardiff Arms Park, the former venue on which the Principality Stadium was later built.
More than three decades later, Cardiff could once again provide the backdrop for a major British heavyweight confrontation.
If the final agreements are completed as expected, the Principality Stadium's combination of capacity, weather protection, broadcast flexibility and boxing history makes it a natural candidate for Fury and Joshua's long-awaited meeting.
After years of negotiations and several apparent changes of direction, the fight could finally be heading home.