The 17-year-old has starred at Under-18 and Under-23 level this season, while he scored two late goals as the Red Devils won the FA Youth Cup on Wednesday evening by beating Nottingham Forest 3-1.
Garnacho has been training with the first team in recent weeks, meanwhile, and he made his debut for the 20-time English champions in the Premier League against Chelsea at the end of April.
The teenager has now been in the squad for Man United's last six league fixtures, and he is again expected to be involved in the team's final Premier League game of the campaign against Crystal Palace.
Garnacho's existing deal at Old Trafford is due to expire in June 2023, but according to the Daily Mail, he is in line for a new long-term contract in Manchester.
The report claims that the youngster will be handed improved terms at the club despite only signing his first professional deal upon turning 17 last July.
Garnacho, who has already been in a senior squad for Argentina, joined Man United's Under-18s from Atletico Madrid in October 2020.
Since arriving at Old Trafford, the attacker has scored 16 goals and registered eight assists in 31 appearances at Under-18 level, while he has struck four goals and provided one assist in 13 fixtures for the Under-23s.
Garnacho has shown his versatility by operating as both a left-sided and right-sided attacker this term, but he played off the left in the FA Youth Cup final at Old Trafford in front of a record-breaking crowd.
Garnacho has also been named the Jimmy Murphy Young Player of the Year for 2021-22 due to his impressive form at youth level this term.
"Alejandro has had a fantastic season and really deserves this recognition," head of academy Nick Cox told the club's official website. "There have been a number of Under-18s players who have performed exceptionally well throughout the year. Reaching an FA Youth Cup final is a fantastic achievement, so this was not an easy decision to make.
"Alejandro has shown great determination from the day that he arrived here from Spain, in the middle of a pandemic. He has adapted extremely well to life in Manchester and continues to improve on the pitch every day.
"Making his first-team debut last month was the culmination of a great deal of hard work from Alejandro himself, his family and a dedicated group of Academy staff. The call-up that he received from Argentina is another fantastic indicator of the progress he has made this season.
"He remains grounded considering all that he has achieved this year and we know that he will continue to grow within our youth development system."
The teenager has represented Spain Under-18s on three occasions, while he made his debut for Argentina Under-20s in March, facing USA Under-20s in a friendly. body check tags ::