River will play bitter rivals Boca Juniors in the first leg of the final of the iconic South American competition on Saturday, with the two teams then set to meet again in a fortnight's time.
Speaking about Palacios ahead of the contest to Cadena SER (h/t Football Espana), D'Onofrio said there will be discussions with the European champions about the player following the conclusion of the competition:
"The clubs haven't talked yet, but [Madrid's head of PR] Emilio Butragueno will talk to [River sporting director] Enzo Francescoli about the player when all this is over [the Copa Libertadores].
"It's likely that Exequiel Palacios will play in Europe next season, given the interest from various European clubs. Once the Libertadores is over, we'll sit down and talk, although we want him here as long as possible."
The transfer appears poised to gather pace in the coming weeks despite the fact D'Onofrio has been critical of Madrid in the past.
Speaking to Marca (h/t Football Espana) recently, he accused Los Blancos of acting "dishonestly" and "disrespectfully" in their attempts to sign the 20-year-old.
Palacios has emerged as one the brightest prospects in Argentinian football, playing his part in River making it to the final of the Copa Libertadores.
The youngster's efforts in midfield haven't gone unnoticed by the national team either, as he made his debut for the Argentina senior side in a 3-0 friendly win over Guatemala in September.
The EiF Video Twitter account commented on his development:
EiF Video @EiF_Highlights
Exequiel Palacios - River Plate's midfield gem Exequiel Palacios' rise to stardom has been superb. The midfielder shuttles all over the pitch with his darting runs and relentless pressing. No wonder the biggest clubs in Europe are fighting to sign him. Incredible prospect. https://t.co/GV70Vb6fFN
Real Madrid have been tapping into the South American market recently to snap up some of the best young stars from the continent.
Vinicius Junior has already arrived and is beginning to make an impression in the first team, while they have also agreed a deal in principle to bring Rodrygo Goes to the club next summer.
Palacios has shown glimpses of talent for River, with his composure in midfield, movement off the ball and vision in the final third making him an exciting rising star.
It's been reported that Madrid are unlikely to have things their own way in pursuit of him, though:
📰 [MD] | FC Barcelona will send scouts to watch 4 players in today's Copa Libertadores, Super Classico final between Boca Juniors and River Plate 🔶 The 4 players that Barça are keeping an eye on are Exequiel Palacios, Gonzalo Montiel, Agustin Almendra and Leonardo Balerdi https://t.co/hFheiNsh2M
Real's midfield has been a pillar in their recent success, with the trio of Casemiro, Toni Kroos and Luka Modric so effective in some huge games. However, with Modric now 33, it makes sense for the club to be considering younger options in this area of the field.
Palacios would find it tough to get game time if he was to arrive at some point during the campaign, and that may be a concern for him as he gears up for a potentially enormous transfer. Still, the opportunity to move to a team like Madrid may be too good to turn down.