The Portugal international has starred for AC Milan this season, scoring 11 goals in his 34 league appearances, helping AC Milan clinch the Serie A title.
Leao's performances have caught the eye of Real Madrid, who are looking to add reinforcements in the final third after Kylian Mbappe turned down a move to Spain, extending his contract with PSG for three years.
According to Football Italia, Real Madrid are ready to offer up to €120m (£102m) to take the attacker away from San Siro.
The 22-year-old still has two years left to run on his current AC Milan contract, while the Rossoneri are currently trying to extend that deal until 2026.
Leao's agent Jorge Mendes is set to meet with the AC Milan hierarchy in the near future, and he is expected to inform them of Real Madrid's interest, but the Serie A champions are confident that Leao's release clause of €150m (£127.4m) will not be triggered by Los Blancos. body check tags ::