The Sun reports that with the club prioritising proven Premier League experience as it prepares for a busy summer transfer window, the England forward, 29, is a prime target for the team as they weigh their attacking options.
Watkins has scored 75 top-flight goals since joining Aston Villa.
The Sun said United are considering moves for either Watkins or RB Leipzig’s 20-year-old Slovenian forward Benjamin Sesko.
However, the Old Trafford club have reportedly ruled out interest in Nicolas Jackson, despite Chelsea’s apparent growing eagerness to offload the Senegalese striker.
Any incoming deal at United is said to be hinging on moving on Rasmus Hojlund, 22, preferably on a permanent basis rather than the loan system used with Marcus Rashford.
Villa have publicly dismissed transfer rumours, insisting Watkins is “not for sale at any price”.
But the club did attempt to offer Watkins to Arsenal during the January window before selling Jhon Durán instead.
Watkins is described as more of a “box player” compared with Sesko, whose pace and mobility also attracted Arsenal’s interest this summer.
United are said to be open to both options in case negotiations with Villa become protracted.
Officials at Old Trafford reportedly expect talks could extend into the final days of the transfer window, while selling Hojlund, Alejandro Garnacho, 20, and Antony, 26, would aid in financing any major signings.
Meanwhile, United have shelved their pursuit of Villa goalkeeper Emi Martínez, 31, following the rejection of a loan offer.
The club reportedly plans for Andre Onana, 28, to start the season as first choice.
This also means no move for Paris Saint-Germain goalkeeper Gianluigi Donnarumma, 24, despite his contract stand-off with the Ligue 1 champions.
The Italian is reportedly seeking a significant wage increase on his current £210,000-a-week deal, which United are unwilling to match, which is said to leave the door open for Chelsea and Manchester City to pursue him.