Manchester City have agreed a £44.5million deal with Shakhtar Donetsk for Fred, according to reports.
Fred has been monitored by both clubs this season, and City failed in a bid to lure the Brazilian to Manchester in January.
But, Goal claim a deal in in principle has now been struck with the Ukrainian side and Fred will link up with his new team-mates once the summer window opens.
Pep Guardiola has been eager to find competition for Fernandinho in midfield and sees Fred as a long-term successor to his Brazil team-mate.
City have remained in constant contact with Shakhtar since January and talks stepped up a level this week.
Manchester City 2017/18 Fixtures
Leicester City (H) – Sat Feb 10
FC Basel (A) – Tues Feb 13 (Champions League)
Arsenal (N) – Sun Feb 25 (EFL Cup)
Arsenal (A) – Thurs March 1
Chelsea (H) – Sun March 4
FC Basel (H) – Wed March 7 (Champions League)
Both club and player have agreed to the move, although there has been no official confirmation and Fred has yet to sign anything.
United will be disappointed to miss out on Fred, but Guardiola had identified the 24-year-old as a key target.
Fred plays in central midfield and has missed just four games, through suspension, for Shakhtar this season.