An unnamed club is free to speak to the 22-year-old after submitting a ‘substantial offer’ which matched a release clause in his contract.
Khan has scored 10 goals for the Glovers this season, and has also contributed with the same amount of assists.
“Otis Khan we’ve had a substantial offer from another club,” Way told YTFC.net.
“We can’t stand in his way because of a clause in his contract so he’ll have a decision to make. He deserves to have the interest he’s attracted.
“He has been fantastic throughout his whole career and I’ve got a decision to make as to how to deal with this now with the Manchester United game coming up.
“I’ve got to sit down with him but ultimately I’ve got to do what’s best for the football club as far as the offers that have come in.
“It was always my fear in the window this would happen, and now it’s just how we deal with it knowing we’ve got a big game on Saturday.”
Way has also revealed there is interest in defender Omar Sowunmi.
The centre-back has been a regular feature for Town this season, scoring twice in 26 appearances.
“There’s been interest in Omar,” he said.
“I’ve had dealings with his agent which was perhaps how I didn’t want it to be. I’ll have to see how that develops.”