Chelsea are closing in on the signing of Joao Felix, in a deal that will pave the way for Conor Gallagher to finally join Atletico Madrid.

The Blues have reached an agreement with Atletico over Felix, who is set to sign a six-year contract at Stamford Bridge with the option for a further 12 months beyond that.

Gallagher’s move from Chelsea to Atletico has been hanging in the balance after a £34.5million deal for Samu Omorodion to move in the opposite direction collapsed last weekend.

But he now finally looks set to get the green light to seal his switch to the Spanish giants, whose move for Gallagher has hinged on them raising transfer funds after they splashed out £81m to sign Argentine striker Julian Alvarez from Manchester City.

Felix scored four goals in 20 appearances during a previous loan spell at Chelsea during the second half of the 2022/23 season.

The 24-year-old Portugal forward spent last season on loan at Barcelona and scored 10 times in 44 appearances across all competitions. He can play either as a second striker, on the left wing or as a No10.

The signing of the versatile Felix will push Raheem Sterling even further down the pecking order at Chelsea.

Sterling was left out of the Chelsea squad for their 2-0 defeat by Manchester City on Sunday and the Blues could look to offload him before the transfer window closes on August 30.

Chelsea have already brought in nine new signings so far this summer are still looking at striker options. They remain interested in Napoli frontman Victor Osimhen.

Felix was left out of the Atletico squad to open the new LaLiga season away at Villarreal on Monday night.