OK Diario says Simeone has agreed a lucrative contract with the west Londoners which will see him pocket a cool £9.28m-per-season.
And it's been suggested the 45-year-old has already informed Atletico chiefs that he will leave the Spanish capital at the end of the season to take charge of the Blues.
Simeone took over Atletico in December 2011 from current Watford boss Quique Sanchez Flores.
The former Argentina international has been a huge hit at the Vicente Calderon and has guided the club to five major trophies during his reign.
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