Manchester City and Chelsea will battle it out for the signature of £105m AC Milan star Rafael Leao

Manchester City and Chelsea are reportedly set to battle it out for AC Milan star Rafael Leao in the January transfer window.

The 23-year-old Portuguese forward has been attracting interest from Europe's elite club's since his breakthrough campaign last season, scoring 11 goals as Stefano Pioli's side won Serie A for the first time since 2011.

Leao was named Serie A MVP for 2021-22 and has continued to shine once again this season, scoring six goals and adding a further nine assists in just 17 appearances so far across both the Serie A and Champions League.

AC Milan, however, are preparing themselves for big-money offers in the region of around £105million in January, according to Italian newspaper outlet TuttoMercatoWeb.

The same report suggests that Milan may consider cashing in on the forward, if the right offer is made, as they do not want to risk losing yet another star on a free transfer.

Stefano Pioli's side have lost the likes of Gianluigi Donnarumma, Hakan Calhanoglu and Franck Kessie in the last 18 months, therefore with Leao only remaining in contract until the summer of 2024, it may be a sensible option.

Chelsea were interested in Leao during the summer and will reignite their interest in January, although they may attempt to use fringe players Armado Broja, Christian Pulisic or Hakim Ziyech as part of the deal to lower the cost.

City are looking to bolster their options in attack having sold Raheem Sterling to Chelsea in the summer and see Leao as a key target.

Both City and Chelsea will face competition from the likes of Manchester United and PSG who have also shown a previous interest in the 11-cap Portugal international.

AC Milan, however, are still determined to tie Leao down to a long-term contract and are said to have open talks over a new deal, ideally before he jets off to the 2022 World Cup.

Milan's final game before the domestic season pauses is at home to Fiorentina on November 13.

Leao is then set to be in Qatar until December, with the January transfer window right around the corner after that.