The Blues are just one of the sides interested in the highly rated midfielder, who is regarded as the hottest commodity in European football at the moment.
However, they have edged closer to signing Isco in the summer transfer window after securing a first option to buy the talented player.
London Evening Standard has learned that the clause was included in the deal that saw Chelsea hotshot Lucas Pizaon join Malaga on a six-month loan.
Chelsea already boast a star-studded midfield, with the likes of Mata, Hazard, Oscar, Moses and Marin vying for three places in front of the holding midfielders, but they plan to further increase competition for places by signing the Spain international.
Isco has become famous for scoring goals from midfield, and has netted 6 times in 28 competitive appearances this season.