Rabbi Matondo has a release clause in his contract which would allow him to move to Manchester United for €60 million this summer.
MEN Sport understand Welsh winger Matondo included a clause in his deal to move to FC Schalke last January which would see him allowed to move to any English side if they matched the fee.
However, former club Manchester City would have a potential advantage in any deal for the 19-year-old with their own buyback clause which could see Matondo rejoin them for €46.5 million.
MEN Sport revealed earlier this month United are monitoring Matondo as a possible back-up target for Jadon Sancho this summer, with the Wales international viewed as a more cost-efficient option.
Despite the aforementioned fee United's initial interest comes from the belief they can sign him for much lower than his release clause, viewing him in the same 'low-risk buy' bracket to Daniel James, who joined for £15million from Swansea City last summer.
German side Schalke are expected to sell first-team players at the end of the season as they look to make up for lost revenue as a result of the coronavirus crisis and United see Matondo as a potential bargain buy.
United have settled on a preference for young British targets in the transfer market, having signed James, Aaron Wan-Bissaka, and Harry Maguire last year. The club is also interested in Aston Villa captain Jack Grealish and Birmingham City midfielder Jude Bellingham ahead of the summer window.
Matondo has started eight times in the Bundesliga this season and played the entire second-half of Schalke's 4-0 defeat to Borussia Dortmund last weekend. They are next in action when they host FC Augsburg on Sunday.