The 20-year-old has impressed during his breakthrough year with the Brazilian giants, featuring in 26 games across all competitions.
However, Luizao has decided against extending his contract and manager Rogerio Ceni confirmed last month that the defender is expected to leave the club when his deal expires on January 31.
"Luizao is very likely to leave," Ceni told reporters. "Not that the club wants it, but because of the player's desire.
"The contract is expiring in January. We will have some departures and changes. It's part of (football). It's a painful process."
It was initially reported by journalist Jorge Nicola, via HITC, that West Ham have decided to walked away from a deal to sign Luizao earlier this year.
"Luizao is super confident that he wants to play in the Premier League," said Nicola. "He has already had advanced conversations (over a move to West Ham). Which is why he rejected several contract extension offers from Sao Paulo.
"The problem is that Luizao has already been notified, via his representatives, that West Ham are giving up. They understand that Luizao might not be able to give them all that they imagined, even if he was really cheap. There would have been no need to pay any money to Sao Paulo."
However, according to UOL, via Hammers.News, West Ham have now 'all but signed' the young centre-back, who is set to move to the London Stadium in the New Year.
West Ham have been troubled with injuries in the centre-back department over the last 12 months, and David Moyes is believed to be keen to bolster his options in the winter window.
Angelo Ogbonna has been slowly eased back into the first team this season following several months out with an ACL injury, while summer signing Nayef Aguerd made his debut for the Hammers at the end of last month after recovering from an ankle injury that he sustained in pre-season.
Ogbonna's long-term future at the London Stadium is believed to be uncertain, with the 34-year-old out of contract next summer, while 32-year-old Craig Dawson has also been linked with an exit.
Elsewhere, West Ham are reportedly lining up an audacious swoop for Barcelona and Spain left-back Jodri Alba.