The 22-year-old impressed during the recent European Under-21 Championship, helping Spain win the title.
According to Marca, Ceballos has attracted the interest of three Premier League giants and Spurs are believed to be leading the race.
The former Real Betis midfielder is currently on holiday following his international exertions and won’t travel to Montreal with the Blancos squad on Tuesday.
Zinedine Zidane does not think Ceballos fits into his plans, and although clubs in Italy and Germany have expressed interest, England seems to be his most likely destination.
Tottenham’s good relationship with Real Madrid reportedly makes them favourites to secure the youngster’s signature.
The La Liga giants could look to insert a buy-back clause into a deal, but Spurs would not be against the idea.
Mauricio Pochettino's side are at risk of losing Christian Eriksen this summer, possibly to the Bernabeu, and could offer Ceballos regular game time ahead of next summer’s Euro 2020 finals.
Arsenal are also said to be keeping a close eye on developments but wouldn’t be happy with a buy-back clause and would seek a permanent transfer.
Liverpool’s interest has grown in recent weeks and the Anfield club would also look for an outright purchase.
Ceballos scored three goals in 23 La Liga appearances for Madrid last season.
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