AC Milan have confirmed for the first time that they are considering selling Kaka to Manchester City, while the player's spokesman says his client has been "authorised" to talk to the Premier League club.
Milan's own television station has confirmed that the club are mulling over the offer - which first emerged on Tuesday after talks between the two clubs.
City officials met with their Milan counter-parts in the Italian city on Tuesday, when they put their world-record breaking deal to the Serie A club.
Sky Italia are reporting that the deal on the table is worth £107million.
Kaka's spokesman Diogo Kotscho admitted that, although a deal was not close, the Rossoneri had given them the green light to open talks.
"Milan has authorised the negotiation with Manchester City," he told Associated Press.
"The next step now is that Kaka's father will eventually talk to Manchester City.
"It's an exaggeration what they are saying in England that it's almost a done deal and it's an exaggeration that Kaka has rejected the offer."
City boss Mark Hughes earlier insisted the club's pursuit of the Brazilian star was not being carried out on a whim.
There was an element of farce about events on Thursday morning as the manager's assistant, Mark Bowen, declared the transfer was moving closer while, at the same time, a respected source in the United Arab Emirates claimed it was dead.
The intrigue only heightened as Hughes was unusually late for his weekly media briefing.
But, when the City boss finally arrived, he decided to make a few things clear - specifically on the theory that he was a mere bystander in the Kaka deal and also suggestions that Blues owner Sheikh Mansour had effectively woken up one day, chosen his must-have star and thrown his vast fortune at the Brazilian to persuade him to sign.
"People should not think this is just being done on a whim," declared Hughes.
"(Executive chairman) Garry Cook, (chairman) Khaldoon al-Mubarak and I have discussed this for numerous months and Kaka was in our thoughts right from the outset.
"It is not something we have only thought of in the last week and decided to act, and it would be naive of people to think I have not been involved in the process.
"It has moved forward at a pace this week. It is a football decision that has been done with a structure and an understanding that we can move it forward."
Various meetings are now anticipated, involving Kaka and his advisors - including his father who has played such a key role in guiding the 26-year-old's career - plus AC Milan and City officials, the outcome of which will determine whether the most amazing transfer ever actually goes through.
"I have no idea whether he will end up here," admitted Hughes. "It is dependent on too many factors."
However, he denied City were adopting a twin approach to their transfer policy, setting money aside for 'galacticos' such as Kaka, who could earn an eye-bulging £500,000 a week, while clawing back funds on less stratospheric deals.
"We are one team and one club," he said.
"We are all working to the same end - trying to be successful on a regular basis.
"You do that by bringing good players to the club to supplement those we already have.
"It is not something that will happen overnight and we have to let people understand what we are trying to do and understand where this club will go in the next few years.
"Once they understand that and recognise the people driving it forward they will become excited by what we can offer."
It may seem like the kind of statement that uses a lot of words to say nothing much, but merely by trying to get a true world star like Kaka, City are signalling an intent to go right to the very top of the game, not just in England but Europe as well.
Milan ready to consider city's kaka offer!! 
Re: Milan ready to consider city's kaka offer!! 
But i read a report yesterday in which Kaka himself claimed that he wanted to grown old at Milan. Kaka is one of my fav. I hope he rejects to to join city 
However if the deal comes through then city will hope his experience will come handy to save the club from getting relegated 
