A restricted free agent, Butters has nominated the Bulldogs as his preferred destination in a decision that is set to have a significant impact on the upcoming player movement period.
The 26-year-old knocked back strong interest from Geelong, as well as Richmond and Collingwood, before settling on the club he supported as a child.
Butters has reportedly been offered a nine-year deal worth up to $2 million per season to join Marcus Bontempelli and Ed Richards in a high-powered Dogs engine room.
Port will have to decide whether to match the Bulldogs' offer and force a trade, or accept pick No.5 in the national draft as compensation for losing Butters.
The Power need draft capital to match a likely early bid for their academy product Dougie Cochrane.
Butters' arrival at the Bulldogs would be a significant boost to their premiership chances in 2027, with star forward Sam Darcy set to return from injury.
New Tasmania coach Hinkley affectionately described Butters as a "dirty little dog" who will suit the Bulldogs' brand under Luke Beveridge.
"It's the perfect match for him," Hinkley said on SEN.
"He is a Western Bulldogs boy. He's grown up a Dogs supporter, he's grown up a 'Bont' (Bontempelli) fan.
"He's everything that the Bulldogs require, and he's everything about the western suburbs in some ways. He's a dirty little dog.
"He's a tough little fella, and he likes to play hard and rough."
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Butters' playing future had been the subject of mass speculation all year, and Hinkley expects the three-time All-Australian to "thrive" under the pressure of a mammoth contract.
"That won't worry him," Hinkley said.
"We've all seen him this year handle the speculation, and has he been under any more pressure than he's ever gonna be in this year?
"He just kept handling it, and he kept stepping up and playing well."
Victorian product Butters, who has played 156 games for Port over eight seasons, including seven under Hinkley, told the South Australian club last month of his desire to move back to his home state.
"Zak is a restricted free agent. With that, the club does have some options," Port chief executive Matthew Richardson said at the time.
"Our responsibility will be to ensure that we get the absolute best outcome for Port Adelaide and our future."
Butters is leaving Port as a three-time best-and-fairest winner who stood in as captain this year when regular skipper Connor Rozee was sidelined by a serious hamstring injury.
Butters' last game in Power colours was a defeat to St Kilda in round 18, when he suffered an ankle syndesmosis injury that ended his season early.
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