Manchester City have agreed a fee with Palmeiras for Allan as they are set to secure a replacement for Savinho.
City will pay an initial €37.5m for the Brazilian winger, with a potential further €2.5m in add-ons.
It means City could spend €140m this week after agreeing a €100m deal with Lille for Morocco midfielder Ayyoub Bouaddi.
But City are set to bring in a club record £85m sum from Tottenham for Savinho and, with Spurs also in talks about Omar Marmoush, they could lose two forwards in the rest of this transfer window.
It prompted them to look for reinforcements and they identified Allan, who has scored nine goals in 96 games for Palmeiras.
If he and Bouaddi join, it would take their summer spending to around £250m, following the £116m arrival of Elliot Anderson and the cheaper deals for back-up goalkeeper Geronimo Rulli and teenage winger Jeremy Monga.
City could also look for a third midfield signing in this transfer window, especially as it looks likely that Nico Gonzalez will move to Newcastle.
Even before selling Savinho, Marmoush or Gonzalez, they have brought in £150m by selling Rodri, Tijjani Reijnders, James Trafford and Nathan Ake.
Read MoreAtletico Madrid move for outcast Chelsea striker as potential Julian Alvarez replacement
