He has been linked with a return to Spain having previously starred for Real Madrid.
Does Morata need to leave Chelsea?
The Portugal global scored just two Serie A goals for Milan last season before being shipped out on loan to Sevilla in the summer.
Following a hard first season at the Chelsea, Morata was hopeful of turning his fortunes around under new manager Maurizio Sarri, but it has again been the same story.
However, he has scored just five times in 16 Premier League appearances and Sarri has often resorted to playing Eden Hazard through the middle.
Morata missed the Carabao Cup semi-final first-leg defeat to Tottenham Hotspur with what Chelsea described as a "minor hamstring injury".
The Telegraph claims Morata will be allowed to leave Stamford Bridge this month if a replacement is signed before the end of January.
La Liga salary restrictions mean Atletico would likely have to offload one or two players in order to take on Morata's wages, which are understood to reach £200,000-a-week when bonuses are factored in.
"It is true that I've heard this rumour, but he is not our player; he is Chelsea's and we have to respect them".
'The player may want to come here over other options, but it is very complicated.
Chelsea are looking for a new forward in the transfer window and are ready to loan out Alvaro Morata, with Higuain their top target.
Could Diego Costa play a role in Morata's exit?
Goal report that Atletico Madrid have entered the race to sign Morata from Chelsea this month.
Atletico joined the hunt for Morata earlier this week in an attempt to replace Diego Costa, who is now recovering from a foot injury.
Atletico Madrid and Sevilla have also expressed an interest in signing the Spain worldwide as Morata looks to end his torrid time in England.
If that happens, Costa could conceivably become surplus to requirements in the Spanish capital.
"Right now, we are the players who are here and we shouldn't be thinking about players from elsewhere".