Derry has 18 months remaining on his contract at Leeds but has not played in a competitive fixture for the Whites since last January, and Dennis Wise is ready to sanction his sale provided an agreement for a fee can be agreed with Palace.
Wise has already signed four new midfielders this month and Derry's chances of featuring in his first team is now limited, especially after a recent disagreement, after Leeds tried unsuccessfully to recall the 30-year-old from his loan before United's New Year's Day meeting with Oldham Athletic.
Warnock, however, has seen his team finish 12 league games without defeat with Derry on board, and he intends to reach an agreement before his side goes to Leicester on January 28.