The 19-year-old midfielder has attracted interest from RB Leipzig and AC Milan but United appear to have won the race for his signature with his arrival at Old Trafford thought to be imminent.
According to Diario Extra, the Premier League side have negotiated a fee of around £4.5million plus add-ons, with the youngster set to sign in the coming hours.
Caicedo caught the eye of scouts during his four international appearances in World Cup qualifiers for Ecuador. He scored his first goal for his country in a 4-2 victory over Uruguay in October.
The midfielder currently plays his football with Independiente del Valle but the club became resigned to losing him earlier this month.
'We have received an offer from a European club for Moises Caicedo, we are negotiating the proposal,' said the club's manager Santiago Morales.
'It is most likely that he will not be in our team in 2021 due to the proposal we’ve received, it is very difficult to keep him.'
Caicedo has made no secret of his desire to join Ole Gunnar Solskjaer's side, sighting Paul Pogba as one of his idols along with Chelsea's N'Golo Kante.
He is said to be comfortable playing in front of the back four but can also adopt a box-to-box role.
United have already signed a number of promising young players including Facundo Pellistri and Willy Kambwala, who both joined in the summer.
Amad Diallo is also set to complete a £37m move from Atalanta next month. The deal was agreed in October but the club are waiting to secure a work permit so he can complete the switch to England.
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