The Manchester club were believed to be interested in signing the highly-rated youngster
The first signings of the Carlo Ancelotti era at Bayern Munich have started to come together with the news that Benfica's Renato Sanches will be joining them next season.
Sanches burst onto the scene earlier this season with a stunning goal for Benfica against Academica, but has been talked about as one of the best players to come out of Portugal's youth systems in decades.
Bayern officially announced the deal on Twitter on Tuesday morning, stating that the 18-year-old would join them from next season.
The deal is rumoured to be in the region of €35 million, while reports in Germany also suggest that a similar fee has been agreed with Borussia Dortmund over the transfer of defender Mats Hummels, who made clear his intention to join the club's rivals recently.
Fee for Hummels reportedly €35m-€38m. Renato Sanches will reportedly cost around €35m.— Daniel Busch (@dan_bu) 10 May 2016
Mats Hummels will join Bayern on a five-year deal subject to a medical.
His final appearance for Dortmund will be against Bayern in the German Cup final on Saturday, 21 May should he be selected.
Both sides have remained silent over the fee agreed for the player.
"Mats is one of the best central defender in the world. With him, we can increase the quality of our team again" said chief executive Karl-Heinz Rummenigge.