The 25-year-old has enjoyed another excellent season at Inter, contributing to 17 goals in 48 appearances for the Italian giants.
This form has prompted interest from a host of European clubs, including the two Champions League finalists.
Recent reports have suggested that Barella is eager to join Liverpool and that the Reds are willing to offer Naby Keita in exchange.
However, according to Italian outlet CMW, Real Madrid are the frontrunners in the race and have offered two players of their own alongside cash + Nacho and Dani Ceballos.
There have been no reports of Inter’s response to this proposal.
Barella is currently contracted until the summer of 2026, meaning both parties would likely have to break the bank to secure a move for the midfielder.
Although Inter are in need of immediate financial reinforcement, Milan Skriniar is supposedly close to joining Paris Saint-Germain, which will help alleviate this issue.
This Skriniar move means Inter can keep hold of key players such as Barella, Lautaro Martinez and Alessandro Bastoni.
The Milan based club have set an asking price of £77.5 million, but they could be tempted by a swap move, particularly if it involves a replacement midfielder.
The Italian international has become a regular in his national team set-up, starring as his country won Euro 2020 last summer.
He has now managed 39 caps for the Azzurri and 135 appearances in three seasons for Inter.
After securing the signings of Darwin Nunez for £85 million from Benfica and Calvin Ramsay for £6.5 million from Aberdeen, Jurgen Klopp is now turning his attention to rebuilding his ageing midfield.
The likes of Jordan Henderson, James Milner and Thiago Alcantara are all the wrong side of 30, so lowering the age profile of this department is a priority for the Merseyside club this summer.
Barella represents the perfect solution to this issue, and Klopp is said to be a long–time admirer of the player.