Chelsea forward Christian Pulisic will turn down Lyon this summer, preferring instead to move to AC Milan after agreeing to a deal in principle with the Serie A club, sources told ESPN.

Lyon have submitted an offer to Chelsea for the United States star, sources told ESPN, although it is less than reported €25 million ($27.2m) fee, a significant portion of which is made up in add-ons.

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Lyon are also unable to meet Milan's wage offer, sources added.

ESPN reported on Friday that Pulisic had agreed on terms in principle with Milan, and sources told ESPN the Italian club intend to make an improved offer after seeing their opening bid of €15m turned down, with Chelsea valuing Pulisic at €25m.

Sources have told ESPN that Pulisic does not see Lyon as the right move, instead wanting to remain playing Champions League football, which Milan can offer.

Pulisic enjoyed a bright early spell at Chelsea after he joined in a €64m deal in 2018 from Borussia Dortmund but has since been hampered by injuries.

His playing time at Chelsea has also become increasingly limited amid several attacking arrivals, including Mykhailo Mudryk, Raheem Sterling, Noni Madueke, David Datro Fofana, Christopher Nkunku and Nicolas Jackson.

Pulisic has made 145 appearances across four seasons for Chelsea, during which he was a part of the club's Champions League-winning side in 2021. He also helped lift the UEFA Super Cup and FIFA Club World Cup later that year.