Walsh was the chief scout at Leicester when memorably they won the Premier League back in 2016.
He brought in players such as Riyad Mahrez and N’Golo Kante when they were relatively unknown.
Legendary Manchester United boss Ferguson has identified Walsh as the ideal candidate for a key role in United’s recruitment strategy.
Walsh knows United assistant manager Mike Phelan well having been his PE teacher in the 1980s.
But Woodward is not keen on bringing in Walsh and wants a former United player to take the role instead.
Sky Sports reporter Rob Dorsett said: “This is really interesting stuff that’s come through in the last few minutes.
“We understand that Sir Alex Ferguson is urging Manchester United to appoint Steve Walsh to mastermind the changes they’re aiming to make to the structure of the club.
“So that’s big news isn’t it, the club’s most successful manager getting involved here.
“You’ll remember Steve Walsh was head of recruitment at Leicester City, played a key role when they won the Premier League title back in 2016.
“It was he who unearthed the likes of N’Golo Kante and Riyad Mahrez.
“But it’s understood Walsh, who spent two years at Everton as sporting director didn’t have a lot more success there and was sacked last summer, he’s been recommended by Sir Alex for a consultancy role at Old Trafford.
“United are looking to overhaul their talent spotting and their talent development strategies.
“Interestingly he was also Mike Phelan’s PE teacher, this was back in the 1980s.
“But it’s thought Ed Woodward doesn’t like the idea.
“He’s much more in favour of bringing in a former Manchester United player for a role that’s going to focus much more on identifying young talent, setting out a long-term plan for the structure.
“So whatever Sir Alex Ferguson is recommending here in terms of Steve Walsh, it looks like Ed Woodward is not going to go for it.
“He would rather see a United old boy coming back to fulfil that role.”