Manchester United will be spared millions in compensation payments with Ruben Amorim in line to take over as the new head coach of AC Milan.

Amorim has been out of work since being sacked by United in January after just 14 months in charge.

United revealed in an accounting report in February that they faced a compensation bill of up to £15.9m to cover Amorim’s exit and that of his staff, including coaches Carlos Fernandes, Adelio Candido, Emanuel Ferro and Jorge Vital.

However, that figure is expected to be slashed now that Amorim is primed to take over at Milan following the sacking last month of Massimiliano Allegri.

Amorim had been in the running to take over at Benfica but the Portuguese club instead moved for Marco Silva, the former Fulham manager.

But Milan have now identified the 41-year-old as the man they want to lead the club following a season of “unequivocal failure” under Allegri when they missed out on Champions League qualification. Allegri had only been in charge for a year.

Milan had originally targeted Andoni Iraola but Liverpool moved quickly to appoint the former Bournemouth manager after Arne Slot’s sacking.

USA and former Spurs head coach Mauricio Pochettino and Crystal Palace manager Oliver Glasner have also been considered by Milan, along with Sebastian Hoeness at Stuttgart.

If Amorim’s appointment at Milan is formalised, as anticipated, he will not have to wait long for a reunion with United.

United announced on Tuesday that they will play Milan in a friendly in Wroclaw, Poland on August 15, a week before the new Premier League season starts. It will be their sixth and final pre-season match.

Amorim was credited with addressing long-standing dressing room issues at Old Trafford during his short tenure but paid the price for poor results and the players’ struggles to adapt to his controversial 3-4-2-1 system.

His final weeks at United were marked by tensions with director of football Jason Wilcox, at whom he “blew up” during a meeting shortly before his sacking.