Real Madrid plan to sell Dani Ceballos at the end of this season.
The midfielder is currently in the middle of his second season on-loan at Arsenal. The deal does not include a permanent option.
Okdiario reports Real Madrid do not wish to consider another third loan for Ceballos and instead will seek to sell.
Real hope to raise €25m from moving on Ceballos this summer.
Arsenal boss Mikel Arteta is expected to be interested in keeping hold of the Spain international.
