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Fluminense's manager Abel Braga has confirmed young Brazilian full-back Wallace is on his way to Chelsea but the club's director says the deal is yet to be completed.
The Blues are closing in on the signing of the 18-year-old in a deal thought to be worth £4.4million.
The European champions already own a 40 per cent stake in the defender, who is expected to return to Fluminense on loan for the rest of the season once an agreement has been completed.
The Brazilian club's manager Braga says Chelsea have been tracking Wallace for a long time and confirmed the Blues have made their move as the teen draws reported attention from several other European heavyweights such as Juventus and Inter Milan.
He told Terra: "Wallace has been negotiated for a long time. He is a player that has impressed. Do you think people abroad sign someone based on one game?
"They watch a player for two, three months - sometimes even a year. They are taking a great player and Fluminense are completely right in selling him."
Fluminense's director, Rodrigo Caetano, says the deal is yet to be done, with the necessary paperwork still to be completed.
"I can't deny there are ongoing negotiations with Chelsea, but the deal isn't done yet, we still have exchange documents," said Caetano.
He added: "And there is a non-disclosure agreement clause, and in case the information leaks, the deal might not happen.
"Let's hope this problem doesn't prevent the deal from happening."