The Croatian international is wanted by Spanish champions Real Madrid and the new Spurs boss acknowledges the midfielder will be sold should a satisfactory offer be received.
Chairman Daniel Levy rebuffed three bids from Chelsea last summer but is prepared to accept around £35 million for the 26-year-old who has reportedly stated his desire to leave White Hart Lane.
Modric joined the North London club from Dinamo Zagreb in 2008 for a reported £16m and Villas-Boas has revealed negotiations are ongoing with interested parties thought to include Madrid, Chelsea and Manchester United.
He said: “The interest that we have from various different clubs shows the importance of the player and what he’s done for Tottenham.
“It’s fair to say that the club respects Luka’s ambitions and his willingness to move on and he respects the fact that he’s an important player for the club and can help us move forward.
“Ongoing discussions will continue with these clubs until we reach an agreement which is acceptable for each party.”
The 34-year-old coach is aware that he will need to fill the Modric shaped void in his midfield and is prepared to raid former club Porto for 25-year-old Moutinho.
The Portugal international was part of the side that won the treble during the 2010-11 season under Villas-Boas shoe conceded he is a target along with Manchester City striker Emmanuel Adebayor.
He said: “He was one of the most important players in Euro 2012, he had a fantastic tournament and he’s an important player for Porto. It doesn’t mean he is the only target but he’s someone we look on with interest.
“Adebayor is another player who was important for last season and it will be a lie if I say we are not looking for a striker. Ade is part of that list.”