Chelsea are set to sign Fluminense right-back Wallace for €5.5 million.
Brazilian news outlet Globo Esporte had reported the deal on Wednesday and, while Chelsea are refusing to make any official comment at this stage, ESPN sources have confirmed that there is an agreement in place.
The Blues have held 40% of the youngster's rights since 2010, when Deco left Chelsea for Fluminense on a free transfer, and have now agreed to pay €5.5 million to secure full ownership. Globo Esporte says Brazil Under-20 international Wallace, 18, will remain at Fluminense on loan before moving to Stamford Bridge in the summer.
The deal is expected to be officially announced at the end of the 2012 Brasileiro season.