Markanday’s contract expires at the end of the season but Spurs had hoped to persuade the 20-year-old winger to sign a new deal and go out on loan.
But Markanday, who has been the outstanding player for Spurs’ U-23 side this season, is eager for first-team football and is in talks over a three-and-a-half year deal with Rovers.
The clubs are discussing a fee of around £500,000, which could rise to over a £1million with add-ons, and Spurs will retain a significant sell-on clause.
A deal could be announced next week.
Markanday is the first British Asian to play for Spurs’ first-team, having made his debut against Vitesse in the Europa Conference League in October.
Blackburn are third in the Championship and eyeing a return to the top-flight after a decade-long absence.