According to Fabrizio Romano, the Portuguese club will pay the Championship side €18m plus add-ons for the 20-year-old Australia international, who is set to sign a five-year contract in Lisbon.
The move represents a significant windfall for former club Bayern Munich: Watford paid a reported €3m for Irankunda when they signed him from Bayern last year, while Bayern's own sell-on clause, originally worth 50 per cent, was reduced to 40 per cent after Watford recently paid to buy back a 10 per cent share of it.
Irankunda joined Bayern from Australian side Adelaide United for around €900,000 in 2024 but never made a senior appearance for the German club before moving to Vicarage Road. He has since impressed during his time in England, scoring four goals and providing five assists in 40 Championship appearances last season, and further raised his profile at this year's World Cup, where he became the youngest Socceroo to score at the tournament.
Interest in the winger had also come from Celta Vigo and Hull City earlier in the window, both of whom had offers turned down, before Sporting moved to agree the fee with Watford.
Irankunda began his career at Adelaide United, making his debut aged just 15 and going on to score 16 goals in 61 appearances before his move to Europe, and was named the A-League's Young Player of the Year in 2023-24.
Watford had previously insisted they would "really like" to keep him for the season ahead, but the scale of Sporting's offer, combined with the player's rising stock following his World Cup exploits, ultimately made a sale too attractive to turn down.