Manchester City are closing in on the signing of Benfica defender Ruben Dias, sources have told ESPN.

City have been given permission to speak to Dias about a deal that could see Nicolas Otamendi join Benfica.

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Pep Guardiola has already added defender Nathan Ake to his squad this summer, but City are set to splash out on another centre-back to further bolster their defence.

Sources told ESPN on Friday that Sevilla remain braced for a second, improved bid from City for Jules Kounde. They rejected an initial €55 million City offer for Kounde last week, believing they'll be able to sell him for more next summer.

Napoli's Kalidou Koulibaly and Atletico Madrid's Jose Gimenez were also considered during the transfer window but City's refusal to meet the asking price for either saw them move on to Dias.

The 23-year-old, who has been capped 19 times by Portugal, is set to arrive in Manchester this week to finalise the move.

Otamendi, 32, is yet to feature for Guardiola's side this season. City are prepared to let the Argentina international leave after five years at the club following his move from Valencia in 2015.