Martyn Waghorn has told Ipswich he wants to leave the club, with Derby County in line to sign the striker in a deal worth an initial £4m, according to Sky sources.
The 28-year-old former Rangers striker scored 16 goals for Ipswich last season in the Championship, and has also been the subject of interest from Sheffield United.
Blades boss Chris Wilder told Sky Sports News that the club had withdrawn from negotiations for Waghorn because the asking price is too high.
Sheffield United's stance leaves Derby as the only club currently prepared to meet Ipswich's asking price, which could see the transfer fee eventually reach around £8m should The Rams secure promotion.
Derby's pursuit of the Ipswich striker is understood to be progressing but Sky sources understand it may only proceed if the club can complete the sale of Matej Vydra to Leeds United.
The Rams are wary of Financial Fair Play restrictions and are thought to be reluctant to complete the deal for Waghorn until they have offloaded Vydra. A broad agreement between Derby and Leeds has been reached, though Vydra's personal terms are still being discussed.
Derby boss Frank Lampard has already signed Florian Jozefzoon from Championship rivals Brentford and secured season-long loan deals for Chelsea's Mason Mount and Liverpool's Harry Wilson.