The Argentine centre-back has been one of the standout performers in the Portuguese top flight over the course of the past few seasons, alerting a number of top European clubs.
AC Milan and Barcelona were thought to be extremely keen to wrap up deals for his signature, but Chelsea have emerged as the favoured candidates for his services.
Reports suggest that a deal is in place for Otamendi to swap the Estadio do Dragao for Stamford Bridge next summer.
Jose Mourinho is thought to be a fan of the South America and is sees him as an ideal long-term replacement for John Terry.
‘The Special One’ has close ties with Porto after helping the to win the 2004 Champions League Final, and has earmarked the 25-year-old as one of his top targets.
A fee is unknown, but it is expected that Porto will make significant profit on the £3.5m they paid Velez Sarsfield for his services in 2010.
Otamendi has made 15 appearances for the Argentinian national team since his debut in 2009 and is hopeful of traveling to the World Cup next year.
Chelsea fans, would Nicolas Otamendi be a good signing?
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