United appointed Ralf Rangnick as interim boss after sacking Ole Gunnar Solskjaer last November.
They have been looking for a permanent manager ever since.
Six months after starting their search, they have now decided on appointing Ten Hag.
Ten Hag, 52, was interviewed by United last month.
He had been on a four-man shortlist alongside Paris Saint-Germain’s Mauricio Pochettino, Spain coach Luis Enrique and Sevilla’s Julen Lopetegui.
That list was then whittled down to two names: Pochettino and Ten Hag.
However, PSG’s performances under Pochettino this season have worked against the Argentine manager. While they are cruising in the league, they struggled in the Champions League and were knocked out in the last-16 by Real Madrid.
United were also put off by the potential cost of releasing him from the remaining 12 months of his contract at the French club.
PSG wanted a £15 million compensation package to let Pochettino go, while they are able to appoint Ten Hag if they pay a £1.7m fee to Ajax.
Those reasons meant United have identified Ten Hag as the best candidate to become the club’s new manager.
The Ajax boss is ready to leave the Dutch champions to take charge at Old Trafford at the end of the season.
Former United first-team coach Rene Meulensteen is among the candidates being considered as Ten Hag’s assistant.
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Ten Hag has enjoyed great success at Ajax, having won 154 of his 208 games in charge.
He has won five trophies with the club, including two Eredivisie titles, as well as guiding them to the Champions League semi-finals in 2019.
Ajax currently have a four-point lead in the Dutch top tier and will contest the KNVB Cup final against PSV later this month.
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