According to Football Insider, the Whites have offered £25 million for the highly-rated winger.
Apparently, the two clubs have already held talks regarding a potential loan deal but the Premier League giants rejected the approach.
It will be interesting to see how Manchester United react to the £25 million bid now.
James was heavily linked with a move to Elland Road before he signed for Manchester United.
The 22-year-old winger has not been a key player for Manchester United this season and he needs to play regularly in order to continue his development and fulfil his potential.
A move to Leeds United could give him the platform he needs. Marcelo Bielsa could help him develop with regular first-team football.
Also, Leeds need to add more pace and unpredictability to their attack and Daniel James seems like a good fit.
Leeds United have had an impressive window so far and if they can wrap up their transfer business with the signing of James, it could be one of their most impressive windows in the recent years.
The Whites have been linked with the likes of Todd Cantwell as well recently.