The 31-year-old's contract La Rosaleda expires in June and the club are trying to tie him down to a new deal.
However, talks with the Spanish international keeper have come to a standstill over the player's wage demands and he could well leave as a free agent.
Contreras's displays in La Liga had led to him being included in the Spanish World Cup squad and he has attracted a number of admirers.
Celta Vigo and Benfica are both chasing Contreras, although any moves for him will depend on other transfer dealings.
The Spanish side have cast an eye towards Contreras as their shot-stopper Pablo Cavallero has been chased by Premiership giants Manchester United and Arsenal.
Both English sides are on the lookout for a new custodian and the Argentinian has caught the eye of both Sir Alex Ferguson and Arsene Wenger.
Benfica coach Jose Antonio Camacho would also like to sign Contreras, but that deal could depend on whether the Portuguese outfit sell winger Simao Sabrosa to Newcastle, with any revenue being used to strengthen the squad elsewhere.
Although Contreras is looking for a better offer, he could be forced to accept a deal with Malaga should the other transfer dealings fail and end interest from both Celta and Benfica.
