Australian Bayliss, 55, has said he will not renew his contract as England head coach when it expires in September 2019.
Farbrace – Bayliss’ current assistant – is taking charge of the Twenty-20 international against Australia on Wednesday, live on Sky Sports Cricket.
Asked whether he thought Farbrace could succeed him on a permanent basis, Bayliss said: “Definitely. If that’s what he wants to do, then I’m all for it.”
Bayliss also revealed that Farbrace’s temporary stint in charge was agreed with ECB director Andrew Strauss six months ago.
“Straussy spoke to me with that in mind, to give Farby some exposure with the top team”, Bayliss added.
“He’s had success doing it before. This is an opportunity to get that experience. I was happy to give Farby the opportunity when he asked me if I’d have any problem with it.”
Bayliss is currently in charge of the England Test, one-day and T20 sides, but he feels a decision to split the role between specialist Test and limited-overs coaches is inevitable.
“There’s burn-out with the coaches as well,” he said. “The coaches are a little bit older than the players, so maybe it doesn’t take quite as much.
“We might not be running around out there – but sitting on the balcony you play every shot and bowl every ball. I think it will go that way.”