Newport Gwent Dragons head coach Darren Edwards says the club have offered fly-half Jason Tovey a new deal in a bid to ward off interest from Cardiff Blues.
Tovey's Dragons contract expires at the end of the season and the 22-year-old's agent has confirmed he has "verbally agreed" a two-year deal at the Blues.
Blues coach Gareth Baber has admitted an "interest" but the Dragons hope an improved deal will tempt Tovey to stay.
"We've offered Jason a new contract, that is with his agency," said Edwards.
"That will be our final contract offer. We offer our contracts at market value and that's as much as we can do.
"The ball is in his court."
If Tovey departs the Dragons it will be a huge blow to the struggling Pro 12 side as the Rodney Parade region will lose captain Luke Charteris in the summer.
Aled Brew's Dragons deal also expires at the end of the season and the Wales wing has also been linked with a move to France.
So the Dragons have launched a bid to keep one of their prized assets at the Gwent region but their closest rivals are certainly keen on the former Wales under-20 international.
"There is an interest," confirmed Blues coach Gareth Baber.
"Jason is a great player.
"I've coached Jason since he was 18 years of age and in terms of the skill level he has got, he'll be a great asset to us here at the Cardiff Blues.
"But he is a Dragons player at the moment and we'll see where we are at the end of March."
Tovey's proposed move to the Blues is sure to cast doubts over the future of fly-half Dan Parks, who retired from Scotland duty on Tuesday, at the Cardiff City Stadium.
Parks, signed from Glasgow in 2010, has a contract at the Blues until the end of the season but has been linked with a move away from south Wales.
Experienced former Wales fly-half Ceri Sweeney has also been linked with a return to home-town club Pontypridd.
It seems Tovey, the 2010 Young Welsh Player of the Year, is the man the Blues hope will create chances for their Wales international back-line of Jamie Roberts, Gavin Henson, Leigh Halfpenny and Alex Cuthbert.
Tovey's agent Jonathan Stuart, who works for Top Marque Sports management company, revealed to BBC Sport in January that his player has "verbally agreed" a "two-year deal" with the Blues.
Tovey, who was part of Wales' training camp ahead of the 2011 Rugby World Cup, will also hope the move boosts his Wales chances as the versatile back wants to be considered as a long-term option at number 10 and compete with Rhys Priestland, James Hook and Dan Biggar.
Tovey was called up by Wales for their 2008 summer tour to North America but was forced to withdraw as he was required to play for the Dragons in a Heineken Cup play-off.
He also had to pull out of Wales' pre-2011 World Cup training camp in Poland because of injury but Tovey passed the 500-point mark for the Dragons in their pre-Christmas derby defeat to the Blues.