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Manchester United had already identified Rafael Leao as a potential alternative signing to Cody Gakpo prior to Liverpool's deal for the PSV Eindhoven forward, according to reports.
United had been strongly linked with a move for Gakpo in the January transfer window, with Red Devils boss Erik ten Hag reportedly keen to sign his fellow Dutchman.
United were in talks with PSV over a deal for the 23-year-old but are now set to miss out on his signature, with Liverpool due to complete a deal for him in the coming days.
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PSV announced on Monday that they had reached an agreement with Liverpool over the transfer of Gakpo, subject to him passing a medical.
Jurgen Klopp's side have reportedly paid an initial £37m fee for winger, which could rise to £45m with add-ons.
Gakpo, meanwhile, has reportedly agreed to a six-year deal at Anfield and could complete the move on January 1, when the transfer window opens.
United linked with AC Milan winger Leao
While it is a blow for United, the club had already identified alternative targets to Gakpo.
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Earlier this month, reports claimed that United were planning to switch their attention to AC Milan forward Leao, should they fail in their bid to sign Gakpo.
The Mirror claimed that Portugal international was being tracked by United ahead of a possible bid.
Chelsea have also been linked with the 23-year-old, who has scored seven goals and provided nine assists in all competitions for Milan this season.
However, Leao could cost significantly more than Gakpo in January.
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Leao reportedly has a release clause of around £130m in his Milan contract at the Italian club are likely to demand a huge transfer fee to part ways with the forward, who is under contract with the club until 2024.
According to Transfermarkt, Leao currently has a market value of €85m (£75m).
But there are major doubts over whether United would be willing to spend such money in the January market.
The Daily Mail have claimed that United are not planning to sign any players on permanent deals next month, with the club "reduced to shopping in the loan market this January as the Glazers look to sell".
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Featured Image Credit: AlamyTopics: Cody Gakpo, Manchester United, Transfers, Premier League