Though the 21-year-old's current club Flamengo insist a €35 million deal is not yet close to completion, the Brazilian looks set to join the Rossoneri
AC Milan have a "basic agreement" with Flamengo to bring attacking midfielder Lucas Paqueta to San Siro, general manager Leonardo has revealed.
The Brazilian side's director of sport Carlos Noval shot down reports that Milan had agreed a €35 million (£30.6m)/$40.5m) deal to sign the 21-year-old in January amid suggestions Liverpool, Barcelona and Paris Saint-Germain are also keen.
And while Leonardo noted that nothing is set in stone with regards to Paqueta, who has been capped twice by Brazil and has scored nine goals for his boyhood club this season, he conceded that the two clubs have reached a deal in principle.
"We have a basic agreement with Flamengo, but the market reopens in January so we still have a little way to go before the official level," he told reporters.
"Now we have to think only of the league and the Europa League and not the market. At the moment he is a Flamengo player, he still has to play some Brazilian league matches. We have to wait for January 3."
Another player that has been linked with Milan is Zlatan Ibrahimovic, who played for the club between 2010 and 2012.
The Swede has recently turned 37, yet Leonardo remains a fan of the LA Galaxy striker.
"It is normal, there is a personal connection with him," he added.
"When we arrived we thought about it, even at the age of 37 he can drag a team.
"Today the market is closed. We have to do things calmly, we must not forget that there are some Financial Fair Play stakes. We want to build a competitive team."
Milan have endured a mixed start to the season under Gennaro Gattuso, though they have not suffered defeat since their season opener against Napoli in August, and are set to face city rivals Inter upon the resumption of Serie A following the current international break.