James Ducker of the Telegraph wrote that City, who came close to signing Fred in January, have "cooled their interest" in the Brazilian, leaving the Red Devils to steal a march in the hunt for his signature.
Ducker's report included quotes from Shakhtar chief executive Sergei Palkin, who assured Italian newspaper Corriere dello Sport Manchester will be the player's destination: "Fred will leave this summer. If not to Manchester City, then to Manchester United. He is ready for the best championships. In addition to being very good, Fred is very professional."
Earlier in March, Fred also confirmed to ESPN Brasil that a summer move to England would be to his liking, although he was less committal when naming clubs he'd choose to represent, via Sport Witness:
Sport Witness @Sport_Witness
Fred reveals Manchester City offer, but teases with other Premier League clubs. "I would be happy to play there… or at Manchester United as well, at Chelsea, Arsenal, clubs of great tradition in Europe and England." https://t.co/TNCeg2YZXy #mcfc #cfc #afc #mufc https://t.co/9EMEg6BCxL
The playmaker is understood to be valued at around £40 million, per Ducker's report, a fee United may be happy to shell out as they prepare for the double departure of Michael Carrick and Marouane Fellaini this summer.
Fellaini's contract is set to expire and doesn't look likely to be extended, while Carrick recently confirmed his 12-year tenure at Old Trafford would end with his retirement at the end of this campaign, via Goal:
Carrick's passing range hasn't been replicated in the United squad in recent years, and it will be up to a new face such as Fred to help replace that composed creativity in the engine room should he arrive.
It also helps that Shakhtar's midfielder boasts a threat from long range and more specifically from dead-ball scenarios, as he displayed in a 2-1 win over AS Roma in the UEFA Champions League last month, via BT Sport:
Ducker made sure to note in his report that while City aren't as motivated to sign Fred, their interest hasn't disappeared altogether, but a more defensively-minded midfielder looks to be Pep Guardiola's priority.
The expected double departure of Carrick and Fellaini increases United's need for reinforcements, but one could argue that the need for upgrades is so dire the Red Devils should attempt to sign Fred regardless.
Runaway Premier League leaders City aren't quite as challenged in the engine room, so much so that a talent like Ilkay Gundogan isn't even guaranteed a starting place at the Etihad Stadium.
A cross-town bidding war could erupt if City decide to revive their previous interest in Fred, but United now look to lead the way ahead of what seems an inevitable summer transfer for Shakhtar's star.