The Spanish international has slipped down the pecking order at the Santiago Bernabeu so far this season, with just three league starts under Zinedine Zidane.
According to the exclusive report, Isco has met with Zidane to discuss his potential departure in early 2021, after growing frustrated at his lack of first team football.
The former Malaga midfielder has attracted attention from both Italy and England in recent months, with Juventus and Manchester City rumoured to be tracking his situation in Madrid.
However, Premier League side Everton have emerged as the front runners to sign him in a €25-30M deal, with Carlo Ancelotti looking to reunite him with James Rodriguez at Goodison Park.
The veteran Italian boss also signed him from Malaga in 2013 during his time in charge in the Spanish capital, with Isco playing a vital role under him.
If the 28-year old does opt to leave Los Blancos in 2021, he will end a seven and a half year career at the club, with four Champions League titles and two La Liga titles under his belt.