Manchester United and Chelsea are close to agreeing a deal for Jadon Sancho, a source has told ESPN.

Chelsea are set to take Sancho on loan for the season with an obligation to make the move permanent next summer for a fee of around 25 million ($32.8 million).

The England forward hasn't featured in a competitive game for United in more than a year and was left out of Erik ten Hag's squad for the first two Premier League games against Fulham and Brighton.

The 24-year-old has two years left on his contract at Old Trafford.

Sancho spent the second half of last season on loan at former club Borussia Dortmund after being exiled from United's first team squad following a public row with Ten Hag.

He was reintegrated this summer and returned to training but despite playing a central role on the preseason tour of the U.S. has been allowed to seal a move to Premier League rivals Chelsea.

A source has told ESPN that United were keen to negotiate a permanent move for Sancho but a valuation of around 40 million has proved a major stumbling block.

Chelsea moved ahead of Juventus in the race for his signature after talks with the Italian side stalled on Thursday.

Significant progress was made during discussions on Wednesday but Juventus failed to reach an agreement.