Leicester City go head to head with Newcastle United for Ligue 1 hot-shot - report
Diallo has scored seven goals for Metz already this season and the Foxes are keen snap him up before he attracts even more interest.
The Senegalese international is currently the joint-second highest scorer in Ligue 1 which follows a 26 goal tally from Ligue 2 last season.
The 24-year-old has risen through the ranks at Metz and they regard him as one of their prized assets.
Despite Diallo's prolific form, Metz find themselves at the very bottom of the French top tier.
Brendan Rodgers is thought to be keen on adding back-up for the free-scoring Jamie Vardy as he looks to mastermind a charge for the top four.
Leicester, who currently sit in third place in the Premier League, have had a barnstorming start to the season which was recently accentuated by a record 9-0 win at Southampton.
However, they do face competition in the shape of Newcastle - who have also been keeping tabs on Diallo.
Newcastle are three points clear of the drop zone and will be hoping to reinforce themselves for a potential relegation battle in the latter half of the season.
Magpies manager Steve Bruce will reportedly include Diallo in a list of targets for January.
Although Bruce did recently state it would be a gamble to sign players with no experience of England's top flight.
Both clubs are thought to be confident that they can secure Diallo's services for the £7m Metz are reported to be asking for.