Nathaniel Chalobah is being linked with a return to Watford, four years after spending a season on loan at Vicarage Road.
The young Englishman, aged 22, has been deemed surplus to requirements at Stamford Bridge, and only one of his 10 Premier League appearances for the Blues last season was a start.
National newspaper reports suggest the fee for the England Under-21 man could be as little as £5million up-front, with performance-based add-ons to follow.
Watford are on the look-out for a midfielder capable of playing in a holding role with Valon Behrami likely to depart over the summer.
Chalobah most recently partnered with new Hornets signing Will Hughes in England Under-21s' European Championship campaign, starting all four of their games as they exited to Germany in the semi-finals.
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