Andrea Dossena is holding talks over a possible switch to Atletico Madrid, skysports.com understands.
The Liverpool full-back has been the subject of constant speculation and seems certain to leave Anfield during the January transfer window.
Dossena has failed to live up to his £7million price tag since joining the Reds from Udinese 18 months ago and a return to his native Italy had been touted as the most likely scenario.
However, one of Dossena's agents, Federico Pastorello, has labelled a move to Serie A club Napoli as 'impossible'.
Pastorello admitted the Reds defender could move to Spain instead, with Atletico understood to be the club involved.
"A move to Napoli is impossible," he told TuttoNapoli.net. "The negotiations for a possible move for Dossena to Napoli are over.
"If I was to make a prediction I would say that Andrea will not return to Italy.
"We are in negotiations with several foreign clubs, with a very important Spanish club who are not in European competition - the deal is even at an advanced stage."
Atletico are currently 15th in La Liga and they have shipped 27 goals in just 15 league games so far this season.
The 28-year-old Italy international is keen to move away from Anfield as he looks to secure his place in the Azzurri squad for the 2010 World Cup.