Monchi, who has been at the club for over two years, is expected to leave due to the team's poor start to the season, with Villa currently sitting 18th in the Premier League.
The club is looking to replace him quickly, and Olabe is a top contender for the position.
Olabe has a strong background in football operations, having previously worked at Real Sociedad, where he helped to develop young players such as Alexander Isak and Martin Odegaard.
He is also known to manager Unai Emery, who has reportedly given him his support for the role.
Olabe's experience and connections could be beneficial for Villa, particularly in terms of youth development, as he has a track record of identifying and nurturing young talent.
It is unclear why Monchi is leaving the club at this time, but Villa's decision to have a replacement lined up suggests that they are committed to making changes to improve their performance.