According to the Daily Star's Gary Jones, Spanish journalist Guillem Balague has confirmed that the youngster has been told he can leave Los Merengues at the end of the season:
Sources in Spain claim David Moyes is considering making a bid for the player this summer, while the Gunners and Juventus are also both said to be seriously interested. Real are understood to be desperate to keep hold of the 21-year-old but have been left with limited choices because of his contract, which is due to expire in 2015.
The move in the market for a striker could also hail the departure of Javier Hernandez who has found himself on the fringes of the United squad.
Even though United have failed to hit the free-scoring heights of last season during Moyes' first campaign in charge of the club, they still boast a stacked attacking surplus that needs some turning over this summer.
Robin van Persie and Wayne Rooney obviously stand as the club's two main striking outlets, but Danny Welbeck and the aforementioned Hernandez continue to provide assistance, mostly from the bench.
However, decisions need to be made on the futures of players like Bebe and Federico Macheda, each caught in seemingly never-ending cycles of loans away from Old Trafford, while Chilean Angelo Henriquez is another young attacker emerging.
For United, this summer should be one of intent, a sign that even though the 2013-14 season has been something of a disappointment, they can still challenge for the best titles and will once again rise to Europe's upper hierarchy.
Signing Morata at a time like this would not send out such a message.
The recruitment plan is affected by the potential departure of van Persie, too, who Sky Sports' Sunday Supplement panel admits could leave the Theatre of Dreams this summer.
Speaking on the show, The Sun's Neil Custis said:
I think it could come to a point where United sell him at the end of the season. There is an argument that they are a quicker team and, certainly yesterday [in their 3-0 win over West Brom], a better team, when he isn't in it.
His attitude and body language have been wrong this season, his link-up play with Wayne Rooney is non-existent and Danny Welbeck offers United a lot more pace up front - although his goal statistics are still not there.
Though the 21-year-old has been prolific during his time with the Spanish Under-21 team, Morata has scored just three goals in 13 La Liga appearances this season, though it's worth noting that 12 of those outings have come from the bench, per Transfermarkt.
Until a decision is made on who out of Moyes' current attacking crop should leave first, United should focus on devoting their attentions toward midfield and defence, in any case.
However, for the club to make that step back up both domestically and in Europe, more proven assets should take priority in a case such as this.
What's more, even though Morata is a starlet of large potential, he would still be unlikely to leave the Bernabeu for cheap, such is Los Blancos' admiration of the forward.
Having struggled to make an impact in Spain's top flight, it would be asking a lot of the player to come to England and expect immediate results, something United can't accept anything less than with their upcoming summer purchases.
Morata may come back in years to come, proving that United most certainly should have plumped for his signature. However, it's simply not a risk that can be taken as things stand, with far superior options bound to be available.