Ugarte is Man United's leading midfield target, and the Uruguay international has allegedly made it clear to PSG that he wants to move to the 20-time English champions before the end of the transfer market.
Discussions over a deal have been complicated by the fact that the French champions are said to be unwilling to drop their £51m asking price for the 23-year-old, who has left out of the squad for his side's 2024-25 Ligue 1 opener against Le Havre last Friday amid the speculation surrounding his future.
However, according to Sky Sports News, progress has been made, with talks between the two clubs 'advancing', and there is a belief from all parties that a deal will go through before the end of the transfer window.
Man United 'make progress' in Ugarte talks with PSG
The report claims that both clubs are keen to agree on a permanent deal, although there is a chance that a loan with an obligation could be settled on late in the transfer window.
Ugarte made the move to PSG from Sporting Lisbon last summer, and he represented Luis Enrique's side on 37 occasions during the 2024-25 campaign, providing three assists in the process.
PSG have signed Joao Neves from Benfica this summer, and having also brought in Desire Doue from Rennes, the club are under slight pressure to make a big-money sale.
Enrique is allegedly not counting on Ugarte for this season, and with the player determined to move to Man United, it does appear likely that a deal will go through before the end of the transfer window.
As it stands, the only issue is PSG's asking price, with personal terms already thought to have been agreed.
Which players could leave Man United before the transfer deadline?
Jadon Sancho continues to be linked with a departure, and it would not be a surprise to see the Englishman leave before the end of the transfer window, but an exit for fellow attacker Antony is complicated due to a lack of genuine interest and the Brazilian's substantial wages.
Facundo Pellistri and Hannibal Mejbri are both seemingly closing in on departures, while Scott McTominay and Christian Eriksen could also leave before the window closes.
Victor Lindelof is another player being linked with an exit, but there have been suggestions that the Sweden international is prepared to see out the final year of his contract even if it means that he does not feature for the 20-time English champions.
Casemiro has also been mentioned as a likely outgoing this summer, but it now appears almost certain that the Brazilian will be staying at Old Trafford for the 2024-25 campaign.