Balde was one of the positive things to come out of an otherwise disappointing domestic campaign for Troyes last season, finishing with 16 goal contributions from 35 appearances.
His performances did not go unnoticed with Lyon going on to make an offer for the player.
Championship outfit Leicester became the late entrants, trying to steal a march on the Ligue 1 club.
However, it now appears that the Foxes will have to look for a solution elsewhere as Lyon are close to finalising a move for Balde, according to French sports daily L’Equipe.
Balde is set to undergo his medical with Lyon on Wednesday morning before the move is officially confirmed.
It will be a season-long loan deal with the French club having the option of making the permanent for around €8m.
Lyon see Balde as providing backup for Alexandre Lacazette this season.
