The La Liga giants have been interested in signing the Belgian since 2016 and it is expected that Los Blancos will have to pay over £100 million ($130m) to complete a deal.
Isco has become dispensable for the Santiago Bernabeu club, meaning the potential sale of the Spain international would go some way towards putting a dent in the figures necessary to sign Belgium international Hazard.
In addition, Madrid have shown restraint in the two previous summer transfer windows, leading to a budget capable of securing a deal for a superstar attacker.
The Spanish capital club do have one factor on their side, however, with Hazard's contract set to enter its final year this summer. Still, that leverage would only go so far given the quality of the player in question.
However, it remains uncertain whether Madrid will make an offer for the 28-year-old, who has previously indicated that he will be happy to remain at Stamford Bridge if a move doesn't materialise.
In that scenario, the Belgium captain will likely see out the rest of his career at Chelsea, though he has made no secret of his desire to join the European champions, stating that it would be a 'dream move'.
N'Golo Kante signed a record-breaking new contract at Chelsea, to the tune of £290,000 a week, in November, and the figures mentioned in talks with Hazard's representatives suggest that he will get an even bigger deal should he stay at the club.
Manchester City briefly entertained the idea of making Hazard their first £100m signing, but a move is not seen as viable anymore by either party.
A quote from Hazard recently hit the headlines, with the attacker telling French TV station RMC: "I know what I am going to do. I have made a decision."
The documentary was filmed two weeks ago, however, and his decision appears to be conditional on the offer that Real Madrid may, or may not, put forward.
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