Manchester United manager David Moyes rejected the chance of signing Fernando in January.
The Daily Mail claim Moyes turned down the opportunity of signing Porto's Brazilian midfielder because he is not certain Fernando can represent a club of Manchester United's stature.
Fernando, who was set to be a free agent in the summer before signing a new deal at the start of the week, was reportedly attracting interest from Manchester United's rivals Chelsea and Manchester City.
The Citizens came close to signing Fernando, who has been nicknamed the Octopus, and his Porto teammate Eliaquim Mangala for a fee believed to be in the region of £35million but was unable to finalise terms with the Portuguese outfit.
However it now appears Manchester United could have signed the midfielder before the Citizens revealed their interest in the 26-year-old.
Red Devils fans were waiting in anticipation for Moyes to improve his defensive midfield options, however the Premier League champions only managed to entice Chelsea's Juan Mata to Old Trafford.