The City frontman has been in excellent form this campaign and is attracting attention from the Spanish giants.
The Mirror's Alex Richards writes that Real Madrid president Florentino Perez met with City owners Sheikh Mansour this week, adding fuel to the fire that a deal could be in the making.
The 25-year-old has found the net an astonishing 16 times in all competitions this season and could well fire City to a second Premier League title.
Real Madrid have reportedly earmarked Manchester City striker Sergio Aguero as their main target for next summer and are preparing a bumper £48million move.
Aguero, who netted City's 94th minute winner on the last day of the 2011-12 Premier League season to hand the Citizens the title, is no stranger to Spanish football, having spent five years with Real's cross-city rivals Atletico.
In an interview with the Mirror, Aguero reportedly expressed his happiness in Manchester and said that he would be staying, but an opportunity to play with the likes of Cristiano Ronaldo and Gareth Bale may just sway his decision.