We reported yesterday that longtime Late Show host David Letterman is retiring next year after nearly 23 years on the air, which has lead to rampant speculation about who may replace the late-night legend. Today, we have a report which indicates that Chelsea Lately host Chelsea Handler is in discussions with CBS to replace David Letterman.

If a deal is worked out, she will be the first female late-night network talk show host since Joan Rivers' short-lived Fox series ended in 1987. Last month, Chelsea Handler announced that she will be leaving her E! Network show Chelsea Lately after her contract expires at the end of the year, which lead CBS to contact her about hosting a syndicated talk show.

While Chelsea Handler wasn't interested in that option, the network considered her to replace Craig Ferguson on The Late Late Show, which airs at 12:30 AM right after the Late Show. Those discussions all took place before David Letterman's announcement yesterday, and now Chelsea Handler has her eye on the Late Show hosting vacancy instead.

This revelation appears to suggest that CBS is, at the very least, considering replacing Craig Ferguson on The Late Late Show. His contract reportedly includes a right of first refusal for the Late Show job, although CBS execs may not want to hand over the job, since his show's ratings have been consistently slipping, with the show losing regularly to NBC's Late Night with Jimmy Fallon in recent years. The network's new show Late Night with Seth Meyers has also been doubling The Late Late Show's ratings since its debut in February, although those numbers are believed to be inflated "due to interest."

Chelsea Handler will reportedly be meeting with CBS chairman Leslie Moonves over the next few weeks to continue her discussions about joining the network's late-night lineup. She reportedly wanted to do a weekly radio program on Sirius XM that would also be taped and aired on Netflix, although Netflix reps denied that she was in talks with them for a show. An insider claims she has also been approached by CNN, HLN and FX, but the CBS job is now the top priority. Of course, it remains to be seen if Chelsea Handler can break out of her niche cable audience and appeal to a wider demographic.