ENPPI football director Alaa Abdul-Sadek told FilGoal.com on Wednesday that his side have accepted a £2.5 million bid from Sunderland to acquire Al-Muhammadi's services in the summer.
Sunderland were also believed to have made an initial approach to sign him during last January's transfer window, only to be rebuffed by ENPPI.
"Whilst Al-Muhammadi was here on trial last summer we have had no subsequent contact with the player, his club or his representatives so these reports are wide of the mark," Sunderland chief executive Steve Walton said on the club's official website.
ENPPI, who promised Al-Muhammadi that they would allow him to depart at the end of the season, are yet to comment on Sunderland's announcement.
However, the 22-year-old's agent Nader Shawki said the Black Cats are still pursuing his client.
"A Sunderland representative was in Egypt last week and sat down with ENPPI officials to discuss a possible deal for Al-Muhammadi," he told FilGoal.com.
Al-Muhammadi made no secret of his desire to experience European football after attracting a host of suitors over the past few years.
He was a key member of the Egyptian side who won an unprecedented African Cup of Nations title in January.
The pacey wide man has scored three league goals for ENPPI, who lie ninth in the Egyptian Premier League table, so far this season.
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