Sky Sports understands Sheffield Wednesday midfielder Liam Palmer will sign a new two-and-a-half-year contract at the club, but will stay at Tranmere on loan until the end of the season.
The 21-year-old has been in impressive form for Ronnie Moore's League One table-toppers, but was expected to return to Hillsborough this month.
But, Owls boss Dave Jones has opted not to bring the player back to Yorkshire, despite the club fighting a relegation battle and instead wants him to gain more playing time at Tranmere.
It is understood that discussions have taken place between the two clubs over Palmer, who has already played 24 times for Tranmere, and he will remain at Prenton Park until the end of the season.
Rovers were keen for the Worksop-born starlet to stay and help them gain automatic promotion to the Championship.