Milan are reportedly in talks with Schalke over a loan deal with an obligation to buy Serbian centre-back Matija Nastasic.
The Rossoneri have been linked with Fiorentina defender Nikola Milenkovic this summer, but Sky Sport Italia journalist Gianluca Di Marzio claims the club has started looking elsewhere.
The report reveals Die Konigsblauen could be willing to let 27-year-old leave on loan with an obligation to buy and the two clubs are currently negotiating the price.
The former Fiorentina defender moved to Schalke from Manchester City in July 2015 and has played 139 competitive games for the Bundesliga side.
He played 29 times for the Viola before moving to the Citizens for €15m in 2012 and Milan are in talks with the Germans to bring the Serbia international back to Serie A.
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