The Belgian defender is set for an Emirates exit this summer, after falling out of favour with manager Arsene Wenger.
Louis van Gaal's side are keen on the 28-year-old, as they look to improve a weakened defence following the departures of Rio Ferdinand, Nemanja Vidic and Patrice Evra.
La Liga giants Barcelona have also been credited with interest in recent weeks but it was understood United were the former Ajax star's first choice.
The Gunners were keen to tie up a deal involving cash and a player, believed to be Smalling, but that idea has been rejected by the Red Devils.
And this has opened the door to a move to a £15m move to Barcelona, which is expected to be completed over the weekend.
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