Manchester United right-back Guillermo Varela has agreed personal terms with Penarol and will complete his transfer next week.
The Manchester Evening News has claimed that the 24-year-old's career at Old Trafford is over.
He joined the Red Devils during the 2013 summer transfer window but never managed to make an impact at the club.
He enjoyed loan spells at Real Madrid Castilla and Eintracht Frankfurt in recent seasons.
He is expected to sign a three-year contract with the Uruguayan side.
"Guillermo decided to play in Penarol for personal tranquility," a source close to the player told the Manchester Evening News.
"The player decided it after how badly he was treated in Frankfurt. His experience in Europe was not good.
"In 2017/18, Guillermo would have been making only £4,000 per week."
