The Spain international has enjoyed an impressive 2020-21 campaign for Los Rojiblancos, contributing 10 goals and nine assists in 36 appearances in all competitions.
The 29-year-old midfielder will become a free agent at the end of the season and he is expected to leave the Bernabeu.
Spurs have previously been linked with the Spaniard in the January transfer window and according to the Daily Star, the Premier League giants could soon offer a contract to the attacker.
Barcelona have reportedly joined the clutch of clubs hoping to sign Bayern Munich midfielder Thiago Alcantara in the current transfer window.
With the Spain international has less than a year left to run on his contract at the Allianz Arena, reports surfaced linking him with a return to Camp Nou – where he chalked up 80 appearances for the first team in all competitions between 2008 and 2013.
Manchester City have announced the signing of Ferran Torres from Valencia.
The Spain Under-21 international has put pen to a paper on a five-year deal which will keep him at the Etihad Stadium until 2025.
The winger becomes Pep Guardiola’s first signing of the summer as a replacement for Leroy Sane, who move to Bayern Munich earlier this summer.