City are said to have opened talks with the player’s representatives but CM Sport claim United will meet his release clause of £106million (€120m), with £78m (€90m) to be paid up front, to try and beat him to his signature.
That would make Felix their record signing, comfortably beating the £89m they paid to re-sign Paul Pogba from Juventus in 2016.
The reports says boss Ole Gunnar Solskjaer is willing to sell two ‘stars’ to fund the deal but does not name any players specifically.
Felix, 19, is one of the most highly-rated attackers in Europe and had an outstanding breakthrough season in 2018-19.
He is capable of leading the line or playing slightly deeper and scored 15 goals in 26 appearances – 21 of them starts – in the Portuguese last term as he helped Benfica to the title.
They might be forced to sell of a club matches his release clause and he is not short of suitors.
As well as United and City, Juventus and Real Madrid are said to be monitoring the player who has drawn comparisons with Cristiano Ronaldo.
They might need to act quickly as Benfica president Luis Filipe Vieira recently revealed he plans to tie him down to a new deal that would see his release clause increase significantly.
“I am happy that all of Europe is talking about Benfica’s talents,” he said in March
“Now it is clear that our project of betting on young players is bearing the desired results.
“Joao Felix the next Ronaldo? There is only one sure thing: Felix is one of the best talents produced by Portuguese football since Ronaldo.
“Juventus and Real Madrid’s interest in him? Ask them.
“At this moment we are not interested in selling him and soon we will increase the release clause in his contract.
“Joao has an incredible technique, he is fast and also very intelligent. He is a good person, he shows that he has important values that make me very proud.”
Felix himself insists he is happy at the club and says he has no immediate need to leave for a new challenge.
“I think that time will tell. I’m good here, I’m very happy, I love the club,” he said.
“I adore these fans who adore me. I want to enjoy the moment, play ball, have fun doing what I like, and then, over time, things happen naturally. I am very happy in Benfica.”