The Red Devils have been heavily linked with a move for the Borussia Dortmund winger in recent months.
But £100m star Sancho looks likely to stay at Signal Iduna Park for another season.
The Evening Standard are reporting that Dortmund are standing firm and will not allow the 19-year-old to leave this summer.
United were expected to pay up to £100m for Sancho’s signature in the coming months but will now shelve the plans.
However, it looks like Swansea’s Daniel James will provide the perfect alternative.
The 21-year-old is deemed by Ole Gunnar Solskjaer as the perfect type of player to bring in to Old Trafford.
And the Evening Standard report that a deal could be done ‘imminently’.
James is likely to cost between £15m – £20m depending on add-ons.
The Swansea winger was all set to join Leeds in January before the Welsh outfit decided they wanted to keep him until at least the end of the season.
Graham Potter’s side were said to be unhappy at Leeds’ £7m plus add-ons offer, which would have came into effect this summer had Marcelo Bielsa’s men been promoted to the Premier League.
Since then, James has continued to shine in Wales, subsequently attracting the attention of United and other Premier League suitors.
But according to Football Insider, Leeds are not giving up the chase to sign the 21-year-old, despite losing pole position in recent months.
The report states the Whites’ Director of Football Victor Orta has personally phoned James’ camp and asked them to wait before making a decision.
Solskjaer wants his side’s business concluded before July 1, meaning United will have to act quickly.