Powell has struggled for first team appearances at Old Trafford, with his development as a player not taking place at the rate the Red Devils had hoped when they signed him as a teenager from Crewe Alexandra.
Already this season Powell has joined Leicester City on loan, but he failed to force his way into the team there and saw that move terminated early.
It means that he is looking for a new club to show his talents off at and Derby are apparently one of the front-runners to land the England youth international.
If Powell does move to the iPro it will be a good opportunity for him to remind people of his talents.
The 20-year-old is coming to an age where he needs to start showing his obvious ability and there will be few better environments to do that than at Derby.
McClaren's men are proving to be excellent at nurturing young players and he could be another to benefit from their productive style of play.
Watford are also said by the Daily Mail to be tracking Powell's availability.