Manchester City are hopeful they have beaten off interest from Chelsea to clinch the £26.5 million capture of Danilo, a move which could end their pursuit of Southampton's Ryan Bertrand, Goal understands.
City have stepped up their interest in Danilo since losing out on Dani Alves, who was set to join on a free but elected to move to Paris Saint-Germain at the 11th hour.
The Blues are still concerned about competition from Chelsea and are wary of losing out on a second right-back target in a matter of weeks, but are doing all they can to get a deal over the line in the coming days.
It is understood their offer totals £26.5m, with no add-ons.
If the move does go ahead, Danilo could join up with the City squad in Los Angeles next week. Real Madrid are currently training in LA while City head there on Friday.
Their failure to sign Alves and subsequent pursuit of Danilo is likely to have a knock-on effect in their pursuit of Bertrand.
City had planned to sign four full-backs this summer but sources close to the club's transfer business had always stressed the importance of the average price of the prospective quartet. Alves' arrival on a free would have effectively meant four new players for the price of three.
But that full-back net spend would rise significantly with the possible arrival of Danilo, as well as spirally costs for Kyle Walker and Benjamin Mendy, and as Pep Guardiola sees the Brazilian as somebody capable of playing right-back, left-back and also in central midfield, the Blues could now make do with three new wide defenders.
Southampton reacted to City, Chelsea and Liverpool's interest in Virgil van Dijk by hiking up their asking price to nearly £60m, and City sources have also been concerned that they will be priced out of a move for the England international even before Alves' snub.
Moving on from Bertrand, and bringing in Danilo as a versatile option, would also free up City to meet Monaco's ever-increasing demands for top left-back target Mendy.
Monaco are proving to be stubborn sellers and are holding out for around £50m for Mendy, who agreed a contract with City weeks ago.
City paid an initial £45m, potentially rising to £50m, for Walker last week after learning Alves had joined Paris Saint-Germain, and Monaco want a similar package.
The Blues had initially hoped to get both top full-back choices for less than £80m combined but are now going to have to pay closer to £100m, and while Danilo will add an extra £26.5m to the overall spend, he can provide cover on both flanks.
Meanwhile, it is also believed talks over Napoli's Pepe Reina broke down over the Italian club's asking price and the goalkeeper's wage demands.
The former Liverpool keeper, who worked with Guardiola at Bayern Munich, had been asking for £150,000-per-week from other Premier League suitors, including Newcastle United, this summer.