Inter Milan winger Ivan Perisic will reject a new contract at San Siro as he has set his sights on joining Manchester United in the summer transfer window.
The 28-year-old was wanted by the Red Devils manager Jose Mourinho, who is looking to strengthen the squad for the next season. United were playing the waiting game as they were aware that the Serie A outfit had to raise €30m (£26.3m, $34.1m) before 30 June in order to comply with Financial Fair Play (FFP) regulations.
According to the Italian publication Premium Sport, the Premier League outfit had submitted a €40m (£35m, $45.3m) bid for the attacker. United were hopeful that Inter would sanction Perisic's sale in order to raise funds to avoid further sanctions for breaching the FFP rules.
However, the Italian side rejected the 20-time English champions' approach and were also successful in raising €30m before the deadline. Inter's new manager Luciano Spalletti is keen on retaining Perisic.
Spalleti and the club's director of football Walter Sabatini have decided to hand the former Wolfsburg man an improved deal to continue at San Siro. They are ready to offer him a new deal that will see his annual wages rise from €3m (£2.6m, $3.4m) to €4m (£3.5m, $4.5m).
Perisic is set to turn down Inter's new deal as he is keen on playing under Mourinho at United. A move to United will help him play in the Champions League and also see him earn €7m (£6.1m, $7.9m) annually. The Croatian international will communicate his decision to his employers when he returns to the pre-season training.
With the player keen on completing a switch to Old Trafford, Inter are open to the idea of letting their star winger leave the club this summer, if United meet their asking price. They are demanding a fee of €50m (£43.8m, $56.7m) to part ways with Perisic.
Inter have identified Bayern Munich's Douglas Costa as his replacement. Should United agree to pay €50m for Perisic, then the Serie A outfit will invest that money in signing Costa from the Bundesliga winners.
Perisic has scored 11 goals and registered eight assists in 36 league appearances for Inter in the 2016/17 season.