The deal could be done for as little as £4.5 million from the Ecuadorian team, per Sky Sports.
The club's general manager, Santiago Morales, suggested a work permit was arranged.
Independiente Del Valle will get a 20 percent sell on clause included in the deal.
The 19-year-old has already played four games for Ecuador, and is a regular for his club in the Copa Libertadores and Ecuadorian top flight.
Caicedo was linked to Manchester United in recent months, but they pulled out of a deal.