Swansea are close to agreeing a deal to sign Renato Sanches on loan from Bayern Munich, according to Sky sources.

Sky Sports News believes the loan fee to be paid by Swansea to the German champions for the year-long agreement is in excess of £2m.

Swans boss Paul Clement has previously worked with the Portuguese midfielder during his time as assistant to Carlo Ancelotti at the Allianz Arena, and it is understood that Bayern's desire for him to play regular first-team football has been key in the deal.

Paul Clement was assistant to Carlo Ancelotti at Bayern Munich

Despite interest from other clubs, Sanches was keen to pursue the Swansea option because of his relationship with Clement.

The 20-year-old joined Bayern from Benfica for £28m last summer after helping his country win Euro 2016, and he made 25 appearances in all competitions for the Bavarian side last season.

However, Ancelotti has said he can leave on loan and he has since been linked with a number of Europe's top sides, with Bild in Germany previously reporting that Liverpool were the favourites to sign Sanches on loan before Thursday's deadline.

Renato Sanches lifts the Euro 2016 trophy last summer

However, Sky sources understand that although the Reds made several inquiries about his availability earlier in the window, they have since dropped their interest in the player.

Sanches was named the Young Player of the Tournament at Euro 2016 and was subsequently linked with a host of clubs, including Manchester United, before completing his move to Bayern last summer.