The 19-year-old, who is wanted by several top clubs and is impressing in the Championship this season, is set to play for Portugal's Under-21s.
He has previously represented England at under-16, under-17 and under-18 levels, since his family moved from Lisbon to London when he was young.
Carvalho has eight goals this season, and has excelled under Fulham boss Marco Silva's guidance.
According to Sky Sports, Carvalho has not passed a British citizenship test, which has allowed Portugal to swoop in to get him to represent them.
Carvalho would still be able to play for England's senior side, provided he does not get a Portugal senior cap.
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