Grealish is widely expected to leave his boyhood club at the end of the current campaign, regardless of whether they avoid relegation from the Premier League or not.
Manchester United have long been the front-runners for the £80m-rated midfielder's signature as Ole Gunnar Solskjaer looks to bolster his squad, and Sherwood believes that the deal is already wrapped up.
"I think Jack Grealish is a deal which is already done. He's a player that they [Manchester United] need," Sherwood told Premier League Productions.
"I honestly believe there's only one club for Jack Grealish. I don't think he can stay at Aston Villa, he needs to progress his career. I think he signs for Manchester United."