Everton are reportedly planning to make a move for Hamburg midfielder Walace.
The Brazil international has made three outings for the Bundesliga outfit since joining in an £8 million deal from Gremio in his homeland last month.
But the Blues are now said to be considering a move for the 21-year-old, who was part of his country’s gold medal-winning side at last summer’s Olympics.
According to the Daily Mirror, Ronald Koeman is keen to strengthen his squad options when the transfer window reopens at the end of this season.
The Everton manager previously added Morgan Schneiderlin to his midfield ranks last month in a £20 million move from Manchester United.
Hamburg have no plans to sell Walace, whose current deal runs until summer 2021, but the threat of Bundesliga relegation this season may force their hand.
Markus Gisdol’s side currently sit three points adrift of the relegation zone, with fallen Premier League champions Leicester City also tracking the player.