Sarpreet Singh's move to Bayern Munich will attract a record transfer fee for the Wellington Phoenix.

Losing the All Whites midfielder is a major blow for the A-League club, but they can at least count on decent financial compensation for the 20-year-old.

The Herald understands that the deal struck between the Phoenix and the Bundesliga team is worth between $750,000 and $1 million.

Though that's not comparable to the massive fees paid in other parts of the footballing world, but it's a large sum for the A-League and the biggest in history of the Phoenix.

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It outstrips the amount paid for Nathan Burns by FC Tokyo after the 2014-2015 season, when the Australian winger scored 13 goals and claimed the Johnny Warren medal as the best player in the league.

"The contract is quite clear and we can't reveal details but there is a fee in there as well as a few add-ons," said Phoenix CEO David Dome. "We are happy with the overall structure and the deal in its entirety, no doubt about it."

Singh's three year contract has been agreed with the five time European champions, with the paper work to be completed this weekend.

Singh, who has just completed his first full season in the A-League, faces a steep climb to make it.

Junior All White Sarpreet Singh in action at the FIFA U-20 World Cup. Photo / Photosport
Junior All White Sarpreet Singh in action at the FIFA U-20 World Cup. Photo / Photosport

Bayern are the fourth richest football club in the world by revenue, and have the resources to sign almost any young player from anywhere.

But Dome is convinced that Singh has a genuine shot, and has been heartened by his dealings with the Bayern officials.

"He's now in the mix," said Dome. "He's actually there … you have to be in the mix to make it happen and he is doing it.

"Our discussions with Bayern to date, and you never know with these big clubs, have been they will play him through the reserve side but they absolutely have an eye on him progressing through to the first team, should his performances warrant it.

"It's not like some clubs, that just hothouse players and sign everyone and loan them out.

"He's not being loaned out, he's going straight into the reserve side which is their feeder team and he will train in house with the Bayern guys. It shows a real intent on behalf of the club that they see something in him and perhaps he has got what it takes to go through to the next step."

The premature departure of Singh hurts the Phoenix, as he was a player to build the club around, at least for another season, and had a rare mix of attacking skills.

But Dome says the club have been preparing for Singh's exit for some time, which will mitigate the impact.

"We fully expected the Under-20 World Cup would be a shop window for a number of our players and we had planned that Sarpreet could have been one of those to receive an offer," said Dome.

"It was something that we were thinking about at the start of this year, about a replacement strategy around Sarpreet if he was to go. We always thought it could play out like this, though we were a little bit surprised obviously that it is Bayern that have come in for him."

Dome said the club intend to fill two of their four vacant visa spots with a striker and a creative attacking midfielder and are already weighing up options.

"We are underway with looking for replacements for Sarpreet and it won't be a long time before those are announced."