Dembele is already being talked about as a future Balon d’Or winner and stole the headlines during France’s 3-2 victory over England in the recent friendly.
Barcelona appeared to be in pole position to clinch a deal for the talented 20-year-old who looks set to leave Borussia Dortmund after just one season following the departure of Thomas Tuchel.
New coach Ernesto Valverde is keen to stamp his mark and help the Catalan giants challenge for major honours again next season.
Valverde is keen to provide more competition for his three star forwards Lionel Messi, Luis Suarez and Neymar and Dembele would be the ideal signing, after Barcelona missed out on signing him last year.
But French newspaper L’Equipe is reporting that PSG have now made contact with Dembele’s agent and are hoping to overtake the Spanish side in a bid to secure his signature.
With Monaco winning the Ligue 1 title last season, PSG”s wealthy owners are determined to strengthen the squad and are hoping to make Dembele one of their big summer signings.