Chelsea have agreed to sign Fluminense full-back Wallace, according to London Evening Standard.
The Blues had already purchased 40% of the player’s rights and got a first option to buy when Deco joined Fluminense on a free transfer from Chelsea.
London Evening Standard understands the Stamford Bridge outfit have agreed a £4.4 million deal for the remaining 60%, although the defender will remain at Fluminense on loan until the end of the season.
Serie A giants Juventus, Inter, Udinese and Napoli were also keen on the 18-year-old, but Chelsea eventually won the race for the player’s signature.
Wallace is an attacking right-back who has already made 23 league appearances for the Brazilian giants and is seen as one for the future at Stamford Bridge.
The talented full-back is currently member of Brazil Under-20 side, while he was a member of Brazil Under-17 side that won the 2011 South American U-17 Championship.