Arsenal have had a £20 million bid ($33.29 million) rejected by Sporting Lisbon for William Carvalho, Goal can reveal.
The Gunners are expected to return with an improved offer for the 22-year-old, although the complex nature of the negotiations mean they are likely to go down to the wire.
Arsene Wenger has sanctioned a formal move for Carvalho as he seeks to further strengthen his squad in the midfield anchorman and centre-back positions.
The Portugal international started his career in central defence although he is now used more regularly in midfield.
Arsenal are also closing in on an £8m deal to sign Olympiakos centre-back Kostas Manolas, and their move for Carvalho is understood to be in addition to the expected capture of the Greece international.
The London club's willingness to push the boat out for Carvalho could be influenced strongly by the outcome of their Champions League play-off tie against Besiktas, with victory paving the way for a minimum windfall of around £25m.
The second leg takes place at Emirates Stadium next Wednesday following a goalless opening leg in Turkey on Tuesday night.
Wenger has turned his attention to Carvalho after Morgan Schneiderlin rejected an offer to join the Gunners in favour of pursuing a move to Tottenham, who are set to make a final bid of around £17m.
Arsenal have also considered Sami Khedira but have been put off by his demands for a basic salary of £200,000-a-week.
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