The Red Devils are determined to bring in a central midfielder this summer and are believed to have identified Ugarte as their leading target in that area of the field.
However, according to The Athletic, Man United have now cooled their interest and are instead focusing on other targets, with the club unwilling to meet PSG's asking price, which is around €60m (£51.4m).
With that in mind, Sports Mole takes a look at three alternatives to Ugarte, with the Red Devils remaining determined to improve their midfield options before the window closes.
Martin Zubimendi (Real Sociedad)
Towards the end of last month, it was claimed that Man United had placed a €60m (£51m) bid on the table for Zubimendi, which would have activated the release clause in his Real Sociedad contract.
There is said to be interest from the Red Devils in the Spain international, but a deal is complicated due to the midfielder's apparent desire to remain with Real Sociedad for at least one more season.
The 25-year-old scored four goals and registered one assist in 45 appearances for his Basque club last season before helping Spain to triumph at this summer's European Championship.
Zubimendi has been with Real Sociedad since 2011, including spending the last five years in the first team, but he would surely find it difficult to turn down a switch to the 20-time English champions if the opportunity arises.
Morten Hjulmand (Sporting Lisbon)
Hjulmand is said to have huge admirers at Old Trafford, including head coach Erik ten Hag, with the Denmark international viewed as a potential midfield incoming this summer.
The 25-year-old scored a stunner for his country at Euro 2024 against England, and he was in impressive form for Sporting last season, scoring four goals and registering four assists in 49 appearances.
Man United will not be going near his release clause of €80m (£67.4m), but if Sporting are willing to negotiate, then it would not be a surprise to see the midfielder make the move to Old Trafford.
An excellent passer and reader of the game, Hjulmand may be viewed as the perfect player to operate alongside Kobbie Mainoo in the middle of the Red Devils midfield moving forward.
Adrien Rabiot (recently of Juventus)
Rabiot is available on a free transfer this summer, having failed to agree a new contract with Juventus.
There remains widespread speculation surrounding the future of the France international, with both Arsenal and Liverpool said to be keen to bring him to the Premier League this summer.
Man United are also known admirers, though, and with the deal for Ugarte seemingly off the table, the 20-time English champions could accelerate their interest in Rabiot.
The 29-year-old will want a huge contract, but the absence of a transfer fee makes the deal very enticing, and the midfielder has a lot of experience at the very highest level.
Man United will need to move quickly if they are to secure his signature, though, as Rabiot will not be a free agent for long.