Hajduk Split have confirmed that transfer talks are being held with Manchester City regarding a possible £7 million ($9m) deal for Ante Palaversa.
The Premier League champions have identified the highly-rated 18-year-old as a top target.
He is not considered to be an option for the present, but could be a useful asset for the future.
With Fernandinho now 33 years of age, a long-term successor is required in the middle of the park.
City believe Palaversa could, in time, be the man to take on that role.
Discussions have been opened with his current club and a deal may be struck during the winter transfer window.
A statement from Hajduk Split in response to the recent rumours read: "Manchester City showed interest in our player Ante Palaversa and we can confirm there is contact between the two clubs."
City are said to have had the talented teenager watched on several occasions.
Scouting reports have convinced them that he would be a shrewd investment.
Any agreement which is reached at this stage is expected to include the option for Palaversa to remain with Hajduk until the summer.
It could be that an extended loan is agreed beyond that point, allowing him to continue seeing regular game time.
He only made the step up into the first-team fold at Hajduk at the start of the 2018-19 campaign.
Positive progress has been made by the captain of Croatia’s U19 side since making his bow.
Comparisons have been drawn to Real Madrid’s World Cup-winning star Toni Kroos, with Palaversa having shown himself to be comfortable on the ball.
He is, however, considered to be a good fit for a holding role, with his vision and passing ability allowing him to dictate proceedings from a deep-lying post.
Those qualities would allow him to step into Fernandinho’s shoes at the Etihad Stadium if his development continues at its current pace.
If he is snapped up by City over the coming days, he will become the second addition made by Pep Guardiola during the January window – with Japanese defender Ko Itakura having already been acquired from Kawasaki Frontale and loaned out to Eredivisie side Groningen.