The Spain international midfielder spent the 2019-20 campaign on loan at Arsenal from Spanish and European giants Madrid.
The report in the British tabloid has claimed that the Gunners prefer to have the 24-year-old back on loan for next season with the option of making the deal permanent next summer.
However, according to the report, Madrid want to sell Ceballos and want £30 million as transfer fee.
According to WhoScored, Ceballos made 18 starts and six substitute appearances in the Premier League for Arsenal this past season, providing two assists in the process.
The former Real Betis man also made three starts and three substitute appearances in the Europa League for the Gunners, scoring one goal in the process, according to WhoScored.
Ceballos also scored one goal in five FA Cup ties and played once in the EFL Cup, according to WhoScored.
Uncertainty over future
A loan deal would suit Arsenal due to their financial situation, but Madrid do hold all the cards.
In other news, Report shares Thiago's wage demands to join Liverpool