The Premier League giants announced a deal with Atalanta on deadline day of the international window for the signing of 18-year-old winger Diallo.
Manchester United had the terms in place for the winger for several weeks, but only pressed the trigger on the agreement with Atalanta on deadline day.
The Red Devils have already submitted a work permit request for Diallo with the UK government and are expecting to have the player in January.
It has been claimed that Manchester United are so confident of getting the work permit that they have agreed to pay a penalty to Atalanta if the deal does not go through.
Manchester United have gambled big on Diallo and have agreed on a deal worth €40m with the Italian club for his signature.
They have been tracking him for the last three to four years and the 18-year-old winger is a highly-rated talent in Italy.
The winger completed a medical with Manchester United on Thursday and the deal is now only dependent upon him obtaining the work permit.