The Fashion Police host is being tipped to join the Elle Macpherson-fronted show in place of current panellists Grace Woodward and Charley Speed.
"The plan is for Kelly to come on board and shake things up," a source for the Sky Living show told The Sun. "She is a massive fan of fashion and has good pedigree working on fashion shows. Crucially, she is also young and the whole point of the show is to find the next big thing."
In response, a Sky spokesperson explained: "All the judges have very busy work commitments and we are discussing the new series with head judge Elle."
Jade Thompson, 20, won the seventh series of Britain & Ireland's Next Top Model in September.
Osbourne was announced as the face of Madonna's 'Material Girl' fashion line back in January, a role that she later described as "intimidating".
> 'Britain & Ireland's Next Top Model' winner Jade Thompson - interview