PSG already shocked the world of football this summer when they signed Neymar for a world-record fee worth £198m.
And, despite their huge outlat on the Brazil international, they have been heavily linked with a move for the highly sought after Mbappe in recent weeks.
Real Madrid were thought to be leading the race for the teenager’s signature earlier in the transfer window.
But the La Liga and European champions’ interest has tailed off with the transfer window drawing to a close.
Monaco have consistently said they have no intention to sell Mbappe this summer.
However, Sky Sports report PSG have made a breakthrough in their negotiations with their Ligue 1 rivals over a deal to sign the striker.
It is claimed Mbappe will move to the French capital on a season-long loan with the obligation to buy him for £166m next summer.
No other player is believed to be included in the transfer and neither club are yet to comment on the move.
PSG hope taking Mbappe on loan will avoid violating UEFA’s Financial Fair Play restrictions before making a permanent move in 2018.
Monaco have already lost key players from last year’s title-winning squad such as Bernardo Silva, Tiemoue Bakayoko and Benjamin Mendy.
But Mbappe was one of the standout performers for the south of France club last season, scoring 26 goals in 44 games in all competitions.