Chelsea transfer news: Luiz money to be spent on Varane and one of three midfielders

All the latest transfer news and gossip from Stamford Bridge this morning.

Overnight Chelsea FC have agreed a deal with Paris Saint-Germain for defender David Luiz. The Brazilian international is set to become the most expensive defender in world football with the move, surpassing his new team-mate Thiago Silva in the process.

The details of the deal should be wrapped up by the end of the weekend, but Luiz has already Tweeted his goodbye to Chelsea fans ahead of a deal believed to be worth around £40 million.

The Blues reportedly have a name lined up to replace Luiz, in the form of Real Madrid talent Raphael Varane.

Varane made his breakthrough at Madrid under Mourinho and the French talent is still believed to be on the Portuguese bosses radar.

The 21-year-old would not come cheap but he has not been a regular at The Bernabeu under Carlo Ancelotti and might just consider a move.

The money raised from the sale of Luiz will also be put toward bringing in a new central midfielder to replace Frank Lampard, who was essentially released by the club yesterday.

It is reported that Mourinho has three names on his shortlist - Paul Pogba of Juventus, Koke of Atletico Madrid and Paulinho of Tottenham Hotspur.

All three players would cost well in excess of £20 million with Paulinho perhaps offering the most cost-effective option.

Finally, and away from transfer news, and Chelsea coach Rui Faria has had his appeal against a six game ban partially upheld by the FA.

The final two matches of his six game ban, for his actions against Sunderland in April, have been suspended for 12 months.

He will still be fined £30,000 for his actions.

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