The deal will see Smalling join the Old Trafford outfit in the summer and completes an astounding rise to prominence for a player who was in the non-league ranks with Maidstone two years ago.

Smalling has caught the eye with some excellent performances in the Cottagers' Europa League campaign this season and despite making only nine first-team appearances, the 20-year-old Londoner is seen by Sir Alex Ferguson as having the talent to make a big impact on the game.

Arsenal have also been tracking the centre-back but, after playing in Fulham's 2-0 defeat to Tottenham, he was expected to travel overnight to Manchester.

"Sir Alex Ferguson doesn't make mistakes when he identifies a young player," Hodgson said. "He realises it will look very cheap in years to come.

"We've known we had a diamond in our midst but unfortunately when you are Fulham you are aware that diamond can be taken away by clubs with more power.

"He should take credit for the work he's put in. He's a good learner and has become a much better player. I don't know who scouted him but he was introduced as a player we should take on and it didn't take long to realise he is a special player."

United are refusing to state how long Smalling, who will complete the remainder of the season at Fulham, has signed his contract for.

However, it represents a moral victory for Ferguson, who lost out to Arsenal after having a fee agreed with Cardiff for Wales star Aaron Ramsey in 2008.

"It just looks like Manchester United offered more money than us," said Wenger. "As long as the player has not signed anywhere, it is not the end of it. Let's see what happens there."