Crystal Palace have agreed a fee of around £21m for the 21-year-old, according to Fabrizio Romano, with the move happening quickly once Khalaili's switch to Inter Milan collapsed after Italian regulations prevented the club from registering him following his medical.
English rules are less strict in such cases, clearing the way for the move to Selhurst Park instead. The Israel international, who joined Union Saint-Gilloise in the summer of 2024, scored six goals and added six assists in 52 competitive matches last season and has been a key part of the Belgian side's rise, including a Champions League campaign, over the past two years.
Khalaili is contracted to Union Saint-Gilloise until 2028, and reports in Belgium suggest his deal with Palace will run to 2031 with the option of an additional year. Nottingham Forest had also shown interest earlier in the window before Palace moved decisively once Inter's approach stalled.
Palace, who won the Conference League last season and will play in the Europa League this term, are targeting a right wing-back to compete with Daniel Muñoz under head coach Pierre Sage's back-three system.
Elsewhere at the club, Chris Richards has been settling into pre-season life under Sage after returning from his break following international duty in North America.
The defender has featured twice already in wins over Al-Ula and Fulham during the club's training camp in Germany, ahead of Saturday's final pre-season friendly against Freiburg.
"It's my third week back here, so you're learning [how to play with] new players," Richards said. "On top of that, you're learning a new way of coaching [under Pierre Sage].
"You're learning a new way of playing. It's been good. It's definitely a learning curve.
"I think everybody's starting to understand each other now... they bring a lot of experience and a lot of good energy. Obviously, they had a very good, successful campaign last year with RC Lens, and so they have a bit of a reputation and now they want to bring it here.
"We're trying to do everything with open eyes, and I think it's been very beneficial so far."