Real Madrid had a £130 million (€150 million) bid for Alvarez rejected by Atletico last month. Alvarez is set to take a holiday following Argentina's World Cup campaign before returning for pre-season with Atletico, at which point talks with the club hierarchy over his future are expected to begin.

Tzolis targeted to fill Trossard's boots

On a separate transfer front, Arsenal are actively exploring a move for Club Brugge winger Christos Tzolis. One source told Sky Sports News he is among the club's primary targets to replace Leandro Trossard, who is departing for Besiktas in a deal worth £17 million.

There is understood to be a long-standing admiration for Tzolis at Arsenal, and the conditions of a potential deal have been assessed — though no formal club-to-club contact has taken place yet. Club Brugge are expected to demand around £34 million for the winger, a figure that would set a new Belgian Pro League transfer record.

Separately, Morgan Rogers is also said to be a player of interest to Arsenal as they reshape their squad ahead of the new campaign.