Martinez, 31, is said to have been negotiation to join on a two-year deal with the option of a third, with Bayern now open to selling for less than €10m – which was their original asking price.
However, talks have hit a brick wall in recent days despite Martinez willing to reduce his salary from Bayern – reported to be €8m per annum – to be in line with others in the squad at San Mames.
It is claimed by the report that Martinez only intends to return to Los Leones if he is to return to La Liga during his career and already has a verbal agreement to join the club this summer, should Bayern facilitate a deal.
A year ago, the Basque club’s president Aitor Elizegi claimed that they would be in a position to sign Martinez should there be a willingness from the player and Bayern to facilitate a deal.
The 31-year-old’s time in Bavaria has often been blighted by injuries but he has clocked up 234 first-team appearances for Bayern since his €40m switch from Athletic Club Bilbao in 2012.
Beñat and Mikel San José are both leaving San Mames this summer, opening up a space in the squad for a deal to be processed.