Lyon have leapfrogged Southampton in the race to sign Shakhtar Donetsk winger Tete, 90min understands.
The Saints were confident that they had beaten off competition from across Europe to secure the Brazilian's signature ahead of a summer move.
However, Lyon have moved quickly to bring in Tete on terms for the rest of the 2021/22 season - a proposal that Southampton cannot offer him.
The Premier League are not allowing clubs to make use of FIFA and UEFA's extended transfer window to sign foreign players plying their trade in Ukraine and Russia amid the ongoing invasion of the former.
But this does not seem to be a problem for Ligue 1 sides like Lyon, who have asked their current Brazilian contingent to convince Tete that a move to France is right for him. Les Gones are working to sign the 22-year-old on an initial three-month deal before agreeing to a longer-term contract in the summer.
Tete is keen on moving to England but the promise of an immediate return to football after his own club season was curtailed could be too good to turn down.
Southampton will not be happy if they miss out on signing Tete given the widespread interest in his services and the prior confidence they had in completing a deal.
Source : 90min