Arsenal and Manchester United's chances of signing William Carvalho have significantly improved as Sporting Lisbon have reportedly decided to sell the midfielder in the ongoing transfer window.

The 22-year-old has been a long-term transfer target for the Red Devils but the Gunners' surprise £24m bid was rejected by the club last week. Carvalho is believed to have a £35m release clause in his current contract, which runs out in four years.

According to Portuguese newspaper Record, Sporting have agreed to offload their academy product in order to raise funds for signing players this summer. The report suggests that the club's hierarchy is willing to sell only if potential suitors are willing to pay the entire amount upfront.

United have repeatedly sent scouts to watch Carvalho in action when David Moyes was in charge at Old Trafford. The Scotsman's successor Louis van Gaal is in the market for a midfielder and has retained their interest in the Portuguese international.

The Dutchman will be without Michael Carrick at least till the end of September after the England international was forced to undergo a surgery on his left ankle ligaments. Additionally, the 62-year-old wants to offload last summer signing Marouane Fellaini with reports suggesting that the Belgian is nearing a switch to Serie A club Napoli.

Meanwhile, Arsenal too are looking to strengthen their midfield but Arsene Wenger's pursuit of Southampton's Morgan Schneiderlin and Real Madrid's Sami Khedira is yet to arrive at any conclusion.

The north London club could once again make an approach for Carvalho given that Sporting's prized asset could now be available for less than his £35m release clause.

The report also claims that the decision to sell the midfielder was made only after the board meeting last week.

Earlier in July, the Portuguese capital outfit's sporting director Augusto Inacio had admitted that the 22-year-old could be sold.

"It's not like the old days when players left Sporting at any price. We are not concerned with William Carvalho because we have alternatives, who will want to play as well. The termination clause ensures a great deal to Sporting," quoted Inacio as saying.

"I am very pleased with the negotiations. It is not easy to negotiate for players, you need to be very shrewd but Sporting have a president who knows how to negotiate with anyone and what is best for the club."