The 25-year-old made just 13 La Liga appearances for the Merengues in 2018/19, scoring three goals.
Spanish outlet OK Diario reports that while Diaz wants to say at the Bernabeu to fight for his place, Real are willing to cash in on the striker.
Spurs have been named as a possible destination as Mauricio Pochettino looks to find a back-up to Harry Kane for next season.
The report claims that Tottenham believe Diaz fits the profile of what they’re looking for in that role, while Pochettino is said to be keen on the signing.
Diaz joined the youth ranks in Madrid in 2011 and has scored nine first-team goals for the club.
He impressed on loan at Lyon in 2017/18, scoring 21 goals in all competitions for the French side.
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