According to Sky's Florian Plettenberg, personal terms between Palhinha and Aston Villa have been agreed for several days, with the Portugal international now waiting on the two clubs to settle the structure of a transfer.
Bayern Munich want a permanent sale worth €25-30 million, while Villa are pushing for an initial loan with an option to buy, a gap that has so far prevented an agreement despite sporting director Damian Vidagany publicly confirming the club's interest.
"We need a midfielder because Amadou Onana is out for the entire season, and João Palhinha is a very good player who would fit our plans," Vidagany said. "We are in talks, but there is currently no agreement."
Palhinha spent last season on loan at Tottenham after struggling for game time under Vincent Kompany during his debut year at Bayern, and impressed enough in England to convince Villa he can address a defensive midfield problem that has grown more urgent since Youri Tielemans' departure to Manchester United.
Newcastle are also said to be interested in the 31-year-old as they search for their own midfield reinforcements, adding a further complication for Villa as they try to bring the Bayern stand-off to a close before the transfer window shuts.
Villa's other position of focus this summer is right-back, where the club have held exploratory talks over a deal for West Ham United's Aaron Wan-Bissaka. The 28-year-old is among a list of targets identified to provide competition for Matty Cash, after an earlier move for Flamengo's Emerson Royal failed to materialise and with academy product Kosta Nedeljkovic attracting interest from Rangers and elsewhere that could open a squad spot.
West Ham have signalled a willingness to sell Wan-Bissaka this summer, valuing the former Manchester United defender at around £25 million, according to the Athletic.
He signed a seven-year contract at the London Stadium after joining from Old Trafford for £15 million in August 2024, meaning his deal runs until 2031, and enjoyed a strong World Cup with DR Congo this summer, starting all four of their matches as they held Portugal to a 1-1 draw and led England until the 75th minute of their last-32 tie before Harry Kane's double turned the game around.