The player's agent Manuel Garcìa Quilòn has admitted Milan are dragging their feet over new contract talks.
Lately, the France international has been linked with Manchester United ahead of next season.
Calciomercato.com reports the English giants are showing interest, but that they may face competition from Real Madrid.
Theo was with Real Madrid earlier in his career.
Both Manchester United and Real Madrid are also chasing fellow left wing-back Alphonso Davies , 24, whose contract with Bayern Munich expires at the end of the season.
Milan rate Theo in the €50m class.